Offsetting Crypto Losses Against Share Gains: What Is Really Allowed in Germany

The short answer is no. Losses from selling Bitcoin or other cryptocurrencies cannot be offset against gains from shares in Germany. The two belong to different categories of income, and the Income Tax Act keeps their loss buckets strictly apart. There is an exception all the same, and it affects more investors than you might think: losses from crypto derivatives fall under the same provision as share gains and can be offset there. Which of your losses belongs in which bucket, the order in which the tax office does the sums, and what you can still steer before the year is out, is set out in this guide.

Why crypto losses and share gains end up in different categories of income

If you buy coins as private assets and sell them again within a year, that is a private disposal transaction under section 23 EStG. A private disposal transaction is the sale of an asset within the statutory speculation period, which for crypto-assets means within the one-year holding period. The gain is charged at your personal income tax rate, not at the flat-rate withholding tax.

Shares run through section 20 EStG instead, income from capital assets. There the separate tax rate of 25 percent applies, plus the solidarity surcharge and, where applicable, church tax, and the bank withholds the tax directly. Two provisions, two systems, two loss circles: that is the whole reason your crypto loss does not make the gain in your share portfolio any smaller.

A loss bucket is nothing more than a legally delimited offsetting circle within which gains and losses may be netted. Across the boundaries of these circles no offsetting takes place, not even when both transactions happened in the same year on the same account.

What you may actually offset losses from private disposal transactions against

Section 23(3) sentence 7 EStG puts it literally: losses from private disposal transactions may be deducted only up to the amount of the gain you have made in the same calendar year from other private disposal transactions. That is narrow, but not as narrow as many believe. This bucket holds more than coins.

• Gains from the sale of other crypto-assets within the holding period, from the large coin to the small altcoin
• Gains from swapping coin for coin, because for tax purposes a swap is a sale followed by a purchase
• Gains from the sale of physical precious metals such as gold bars or silver coins within a year
• Gains from the sale of art, collectibles, classic cars and similar movable assets within the period
• Gains from the sale of a property within the ten-year period, to the extent it was not owner-occupied

A crypto loss can therefore certainly neutralise the gain from your gold sale. It simply cannot touch the dividend and the capital gain from your share portfolio. The exemption threshold matters as well: if your total gain from private disposal transactions in the calendar year stays below €1,000, it remains tax free. An exemption threshold is not an allowance; it falls away entirely once it is exceeded, and the whole gain is then taxable.

Losses on coins you have held for longer than a year are worth nothing for tax. Once the holding period has expired the sale is tax free, and that exemption works in both directions. On September 7, 2026 we set out in our report on the Annual Tax Act that the one-year period survives the legislative process now under way.

A special case that often comes up in practice: coins that are effectively gone through an exchange insolvency, a hack or a token that has been switched off. Such a total loss is not a disposal, because nobody is buying anything. How to proceed in that case, and which evidence the tax office wants to see, is described in our guide to the crypto total loss.

The exception: crypto derivatives meet share gains in the capital bucket

Now it gets interesting for everyone who does not merely hold coins but trades with leverage. A derivative transaction is a contract whose value is derived from an underlying and which is directed at a cash settlement of the difference. Crypto CFDs, bitcoin futures and comparable derivatives fall under it. Gains and losses from them count under section 20(2) number 3 EStG as income from capital assets, which is to say in precisely the bucket where your share gains also sit.

Up to and including 2023 that helped little, because losses from derivative transactions could be offset only up to €20,000 a year and only against gains of the same kind. The legislature deleted this restriction in section 20(6) sentences 5 and 6 EStG without replacement in the Annual Tax Act 2024, retroactively for all open cases through the application rule in section 52(28) EStG. Since then, losses from derivative transactions can be offset against all income from capital assets: against gains from share sales, against dividends, against interest, against income from funds.

The reverse direction stays blocked. Losses from the sale of shares may still, under section 20(6) sentence 4 EStG, be offset only against gains from share sales. In concrete terms that means the loss on the bitcoin future may push down the share gain, while the loss on the share may not touch the future gain.

In practice a great deal depends on where you trade. If your provider runs a domestic securities account, it carries out the offsetting within the calendar year itself and withholds only the remaining capital gains tax. If you trade through a foreign broker, you have to declare the income yourself in Annex KAP. Which providers supply German tax data and which do not is shown in our crypto broker comparison. Incidentally, you need a loss certificate from your bank only if you want to carry losses from one securities account to another; it has to be applied for by December 15 of the current year.

Staking, lending and interest: section 22 number 3 EStG opens a third bucket

Anyone lending coins or putting them to work in a network often collects income that does not come from a sale at all. Staking rewards, lending interest and fees for providing liquidity are income from other services under section 22 number 3 EStG. An other service is any act or forbearance that triggers a consideration and is neither a disposal nor an investment of capital in the narrower sense.

This third circle is the narrowest of all. Losses from other services may be set only against income of the same kind, and here too there is an exemption threshold, which stands at €256 in the calendar year. A crypto loss from a sale therefore cannot neutralise a high staking yield, even though both happened in the same wallet. Anyone receiving rewards should value their accrual to the day, because the value at the moment of accrual is at the same time the later acquisition value for the holding period.

That leaves you with three offsetting circles, each obeying rules of its own: the circle of private disposal transactions with coins, gold and art; the capital bucket with shares, dividends and derivatives; and the circle of other services with staking and lending. Not one euro moves across these boundaries.

The order in which gains and losses are offset

Within an offsetting circle the tax office works through a fixed sequence, and it matters more than any individual optimisation, because it determines when money comes back.

1. First the offsetting in the current year: all gains and losses of the same circle from the same calendar year are netted. Only if a minus remains does it go any further.
2. Then the loss carryback: the remaining loss may be carried back one year, against the previous year's gain from the same circle. The legal basis is section 23(3) sentence 8 EStG in conjunction with section 10d EStG. The tax office amends the old assessment for this and refunds tax paid in excess.
3. Finally the loss carryforward: whatever is then left moves into the following years without a time limit and waits there for the next gain from the same circle.

Whether the carryback is worthwhile depends on your tax rate. If your taxable income was high last year and is low this year, the carryback brings more than the carryforward. On application you can waive the carryback and have the full amount carried forward; this waiver is expressly open to you in the tax return.

Loss assessment: why the carryforward is worthless without a notice

A carried-forward loss exists for tax purposes only once the tax office has separately assessed it. The loss assessment under section 10d(4) EStG is a notice in its own right, which records the amount as at the year end in binding form and is automatically set against the next profitable year. You get it only if you declare the loss in the tax return for the loss year.

That is precisely where most people come unstuck. Anyone who had only losses in a year and therefore files no tax return gives the carryforward away. Check the assessment notice every year for the amount stated and file it with the documents you keep permanently. If the figure differs from your own calculation, you have one month to lodge an objection.

The figures behind it have to hold up. Under the Federal Ministry of Finance circular of March 6, 2025 on the income tax treatment of certain crypto-assets, extended record-keeping and cooperation obligations apply to you, particularly with foreign exchanges. The circular replaces the 2022 version and describes which documents the tax authorities expect. A clean annual report from a tax tool is therefore the basis of your return and no longer a convenience; which programs correctly reproduce German forms and FIFO is shown in our comparison of crypto tax tools.

Tax loss harvesting before the year end: what works within the speculation period

Tax loss harvesting means deliberately realising paper losses in order to net them against gains from the same offsetting circle. A paper loss is a pure price loss on paper; for tax it counts only once you sell or swap. Because the offsetting is tied to the calendar year, December is the month in which this is decided.

The process is manageable. You gather your transactions from all wallets and exchanges in one place, determine the cost base for each position using the FIFO method, check which positions are down and still within the holding period, and work out how much loss you need to bring your taxable gains from private disposal transactions to zero. FIFO means the coins bought first count as sold first; for crypto-assets held as private assets this method is what the tax authorities require, and there is no free choice of the most convenient acquisition.

You should know two limits. First, the exercise achieves nothing if you have no gains at all from the same circle in the same year; you then merely create a carryforward that may sit there for years. Second, a position close to the end of the holding period loses its future tax exemption through the sale. Anyone selling a position two weeks before its anniversary at a small loss trades a certain tax-free gain for a small tax effect.

Buying back the same day: wash sale risk and abuse of structuring

The question comes up immediately when the portfolio is down: can I sell, take the loss and buy back straight away? German tax law knows no wash sale rule that forbids this; such blocking periods exist in the United States, for example. In Germany the question is instead one of abuse of structuring, meaning a legal arrangement that serves only to save tax and cannot be explained in economic terms.

The Federal Fiscal Court has ruled on this for securities: anyone selling paper at a loss and buying it back the same day in the same kind and quantity, but at a different price, is not abusing structuring options within the meaning of section 42 of the Fiscal Code (judgment of August 25, 2009, case number IX R 60/07). The decision was handed down on private disposal transactions under section 23 EStG and is therefore readily transferable to crypto-assets. A supreme court decision specifically on coins does not yet exist.

For practical purposes that means the buyback is possible, but it starts a new holding period for the coins bought back, and the price can move between sale and repurchase. Document both transactions with a time stamp, quantity and price, so that in case of doubt it can be shown that two genuine market transactions took place.

Annex SO: where crypto losses go in the tax return

Private disposal transactions belong in Annex SO of your income tax return, in the section on disposals of other assets. There you enter the sale proceeds, the acquisition costs and the income-related expenses for each transaction; the minus follows from the calculation, and there is no separate field for the loss. Gains from derivative transactions and shares run through Annex KAP instead, while staking and lending income goes in Annex SO in the section on other services.

Anyone with many trades submits the individual schedule as an attachment to the return and refers to it in the form. That the tax authorities now also receive the data from elsewhere is the second reason to be precise: since January 1, 2026, crypto service providers have been reporting master data and aggregated transactions to the tax authorities, and as we reported on September 13, 2026, it is gross amounts and not gains that are transmitted. A return that departs from these reports stands out.

Five pitfalls that cost you the loss offset

• No tax return is filed in a pure loss year. No return means no assessment notice, and no notice means no carryforward.
• The loss is entered in the wrong bucket. A CFD loss in Annex SO is just as wrong as a coin loss in Annex KAP.
• Coin-for-coin swaps are overlooked. Every swap is a disposal followed by an acquisition for tax purposes, even without a euro reaching the account.
• The holding period is tracked per wallet instead of per acquisition. What counts is the individual entry under FIFO, not the place where the coins sit.
• Fees are left out. Trading and network fees increase the acquisition costs or reduce the proceeds, and thereby enlarge the deductible loss.

None of these points is spectacular. Together, though, they decide whether your tax burden ends up falling by the amount the law grants you, or whether part of your losses goes unused.

Offsetting crypto losses: what to take away

1. Sort your positions by offsetting circle before you sell anything: coins and precious metals into the bucket for private disposal transactions, CFDs and futures into capital income, staking and lending into other services. Where your provider supplies German tax data and where you have to declare it yourself is shown in the broker comparison.
2. Pull a complete transaction report across all wallets and exchanges before the turn of the year and check which paper losses are still within the holding period. You will find a tool that reproduces FIFO and the German forms in the comparison of tax tools.
3. Declare even a pure loss year in your tax return and check the notice on the loss assessment. When you go on to plan gains, the same tax tool comparison will help you set the carried-forward amount off cleanly.

(As of September 19, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy. This text does not replace tax advice in an individual case.)