GLOSSARY · TAX & ESTATE
Wash sale rule
A rule that disallows a capital loss if you, or your spouse, buy a substantially identical security within 30 days before or after the sale, in any account. The disallowed loss is usually added to the cost basis of the replacement, so it is postponed rather than lost, except when the replacement is bought in an IRA.
Also called: wash sale, 30-day rule
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CHAPTER · ADVANCED TAX STRATEGIES · DEEP DIVETax-Loss Harvesting and the Year-End PlaybookRELATED TERMS
SOURCES
- Publication 550, Investment Income and Expenses (wash sales). Internal Revenue Service.