The wash sale rule is a regulation enforced by the Internal Revenue Service (IRS) that prevents investors from claiming a tax loss on the sale of a security if they purchase a "substantially identical" security within 30 days before or after the sale, creating a 61-day window. This rule applies to stocks, bonds, mutual funds, exchange-traded funds (ETFs), and options, and it disallows the tax deduction for the loss in such cases. The disallowed loss is not lost permanently; instead, it is added to the cost basis of the newly acquired security, effectively deferring the tax benefit until the replacement shares are sold. The holding period of the original security is also added to the holding period of the replacement shares, which can affect whether future gains are treated as short-term or long-term capital gains. The rule applies across all accounts, including IRAs and spousal accounts, and requires investors to monitor transactions in all their accounts to avoid unintended wash sales.
Charles Schwab
schwab.com › learn › story › primer-on-wash-sales
Wash-Sale Rule: How It Works & What to Know | Charles Schwab
Generally, if a security, such as stocks, exchange-traded funds (ETFs), and mutual funds, has a CUSIP number (a unique nine-character identifier for a security), then it's most likely subject to the wash sale rule.
Fidelity
fidelity.com › learning-center › personal-finance › wash-sales-rules-tax
Wash-Sale Rules | Avoid this tax pitfall | Fidelity
August 28, 2025 - When you sell an investment that ... wash-sale rule keeps investors from selling at a loss, buying the same (or "substantially identical") investment back within a 61-day window and claiming the tax benefit....
Why does wash sale rule exist and how is tax loss harvesting anything special?
If there was no tax loss allowed you would have to pay taxes on 50K not 40K More on reddit.com
15
0
April 17, 2024Can someone explain wash sales to me?
Welcome to our sub, u/OnceInABlueMoment ! I'm happy to take a moment to assist with your wash sale inquiry this weekend. Wash sales can be complex, and traders need to recognize these transactions and the tax ramifications. Let's start with the wash sale definition. The IRS defines a wash sale as a sale or other disposition of stock or securities on which the seller realized a loss within a 61-day period (beginning 30 days before and ending 30 days after the date such sale or disposition took place) and replaces it with stock or securities that are "substantially identical." More specifically, the wash-sale rule states that the tax loss will be disallowed if you buy the same security, a contract or option to buy the security, or a substantially identical security. With this definition in mind, you may see how the trader in the Forbes article could have arrived at their situation. In short, it sounds like they kept buying the stock within the wash sale window after they sold it at a loss. This led to the loss being added to the cost basis of the newly acquired shares, and they kept repeating that cycle. It sounds like they continued to buy the stock through the year, never getting to claim any of the losses. They would've needed to sell the shares and not repurchase the stock within 30 days of the sell date to claim the loss. Now we can apply this understanding to your situation. As you mentioned, you are following a similar trading strategy to the trader in the Forbes article. If you keep incurring wash sales, you cannot claim the losses associated with the wash sales. This can lead to a tax situation where your taxable gains substantially outweigh your losses. I recommend reviewing a few resources on our website to understand the wash sale topic better. I've copied links for a couple of articles for you below. Wash sale: Avoid this tax pitfall Wash-sale rule: What to avoid when selling your investments for a tax loss Please let us know if you have any additional or follow-up questions. More on reddit.com
40
16
April 15, 2023Wash Sale Rules
No expert, but I believe a wash sale is when you sell a security for a loss and then buy that security back within 30 days of the sale. So, to avoid it anytime you sell a security for a loss, avoid a wash sale by not buying it back until 31st day. I used to worry about it but it’s pretty clearly stated on your consolidated 1099 from your broker. More on reddit.com
29
4
August 8, 2023Wash sale rule for options - with use cases
The wash sale rule prevents you from deducting a loss from your income while you have the new position open. It has no impact on profit or loss... It has no impact on profit or loss. It has no impact on profit or loss. It has no impact on profit or loss. Once you close the new position if there is a loss you can then deduct the loss from your income. Unless of course you open the position again within the wash sale window. More on reddit.com
95
12
February 3, 2024Videos
04:31
What is a Wash Sale? | Understanding Trader Taxes - Lesson 1 - YouTube
04:15
Understanding the Wash Sale Rule - YouTube
08:07
Wash Sale Rule Explained: Avoid Costly Trader Tax Mistakes (With ...
00:56
The Wash Sale Rule Explained - YouTube
What crypto investors need to know about the wash-sale rule
04:05
Capital Loss While Avoiding a Wash Sale - YouTube
TurboTax
turbotax.intuit.com › tax-tips › investments-and-taxes › wash-sale-rule-what-is-it-how-does-it-work-and-more › c5ANd7xnJ
Wash Sale Rule: What Is It, How Does It Work, and More - TurboTax Tax Tips & Videos
November 1, 2025 - Under the wash sale rule, your loss is disallowed for tax purposes if you sell stock or other securities at a loss and then buy substantially identical stock or securities within 30 days before or 30 days after the sale.
Reddit
reddit.com › r/fidelityinvestments › why does wash sale rule exist and how is tax loss harvesting anything special?
r/fidelityinvestments on Reddit: Why does wash sale rule exist and how is tax loss harvesting anything special?
April 17, 2024 -
Say I have 100k to start the year. I buy two stocks. Stock A gains me $50k. I sell the stock and realize the gains. Stock B loses $10k and I sell the stock and realize the loss. I am up $40k net and will owe taxes on $40k. Where exactly is the tax loss harvest other than owing taxes on the sum of gains and losses? Where is the "tax loss harvest" benefit that we speak of?
In scenario 2, let's say I buy right back into stock B without waiting 31 days or whatever. Why does this have implications on anything? I did in fact lose and realize $10k on this stock and it isn't guaranteed I'll ever make it back.
Top answer 1 of 5
10
If there was no tax loss allowed you would have to pay taxes on 50K not 40K
2 of 5
7
True tax-loss harvesting uses a pair of similar stocks, a pair of similar ETFs, a pair of similar mutual funds, etc. The idea is to pick a pair where you wouldn't mind holding either one for the long-term. Initially, you buy the first in the pair. Should it suffer losses, you sell that loser and immediately buy the second in the pair. That way you remain invested in something similar. Should the second one tank too, switch back to the first in the pair in the exact same way. One day, assuming you made a good investment choice, one of the members in the pair will experience gains. Maybe enough gains that you decide to keep a hold of it for a while. Meanwhile, you've racked up losses which you can use to offset gains. And those losses can be carried forward into future years indefinitely. Me personally? I still have about -$65K in losses that I captured in the Covid Crash. I had more initially, but used a lot of my losses to offset the gains I had when I sold a rental property. Happy investing!
Investor.gov
investor.gov › introduction-investing › investing-basics › glossary › wash-sales
Wash Sales | Investor.gov
A wash sale occurs when you sell or trade securities at a loss and within 30 days before or after the sale you: ... Acquire a contract or option to buy substantially identical securities. Internal Revenue Service rules prohibit you from deducting losses related to wash sales.
Investopedia
investopedia.com › terms › w › washsale.asp
Wash Sale: Definition, How It Works, and Purpose
September 19, 2025 - A wash sale occurs when an investor sells a security at a loss and then purchases the same or a substantially similar security within 30 days, before or after the transaction. This rule is designed to prevent investors from claiming capital ...
J.P. Morgan Private Bank
privatebank.jpmorgan.com › private banking & wealth management › insights › wealth planning › for your year-end tax planning, beware the wash sale rule
For your year-end tax planning, beware the wash sale rule | J.P. Morgan Private Bank U.S.
August 25, 2025 - Another key determination is whether two securities are “substantially identical”; but, the wash sale rule uses this term without precisely defining it. Ultimately, a taxpayer must consider the economics of the two positions.
Washington Department of Revenue
dor.wa.gov › taxes-rates › retail-sales-tax › services-newly-subject-retail-sales-tax
Services newly subject to retail sales tax | Washington Department of Revenue
As of Oct. 1, 2025, a new law (ESSB 5814) requires that certain services now be taxed when sold. If you buy or sell these services, retail sales tax must be applied.
IRS
apps.irs.gov › app › vita › content › 10s › 10_04_011.jsp
Case Study 1: Wash Sales
Case Study 1: Wash Sales · Case Study 2: Long-Term or Short-Term · Case Study 3: Long-Term or Short-Term · Skills Warm Up: Holding Period · Case Study 4: Basis and Holding Period · Proceeds from the Sale · Case Study 1: Sales Price · Skills Warm Up: Form 1099-B ·
Bullish Bears
bullishbears.com › trading education › trading help › learn to trade › trading rules › wash sale rule explained
Wash Sale Rule: Definition, How it Works, and Examples
August 28, 2025 - What is the wash sale rule? This happens when you sell a security or stock at a loss then buy it back within 30 days.
CCH
answerconnect.cch.com › topic › 49e2cfa27cb2100091e090b11c2ac4f1039 › wash-sales-of-stock-and-securities
Wash Sales of Stock and Securities
A comprehensive Federal, State & International tax resource that you can trust to provide you with answers to your most important tax questions.
Williamson Herald
williamsonherald.com › features › business › financial-focus-is-this-a-good-year-for-tax-loss-harvesting › article_851c24fa-5e3d-4670-a0e9-1c232e022df2.html
Financial focus: Is this a good year for tax-loss harvesting? | Business | williamsonherald.com
December 6, 2025 - This rule prevents you from claiming a loss if you, or your spouse or a related party, repurchase the same or a "substantially identical" investment within 30 days before or after the sale.
U.S. News
money.usnews.com › investing › term › wash-sale
Wash Sale Definition | Investing Dictionary | U.S. News
December 11, 2023 - The wash sale rule prevents investors from claiming the tax benefits from stock losses if they have also purchased the same stock any time during a window ranging from 30 days before the sale date to 30 days after the sale date.
FasterCapital
fastercapital.com › startup-topic › Wash-Sale-Rule.html
Wash Sale Rule - FasterCapital
On the other hand, the wash sale rule is a regulation that prevents investors from claiming a loss on the sale of an asset and then immediately repurchasing the same or a substantially identical asset.
Cornell Law School
law.cornell.edu › lii › wex › wash sale
wash sale | Wex | US Law | LII / Legal Information Institute
A wash sale is defined as the sale of an asset, such as stocks or bonds, at a loss, followed by the repurchase of the same or substantially similar asset within 30 days before or after the sale.
Bottom Line, Inc.
bottomlineinc.com › financial › taxes › what is a wash sale?
What Is a Wash Sale? - Bottom Line, Inc.
October 21, 2025 - Any purchase of a stock or of a “substantially identical” stock either 30 days before or 30 days after you’ve sold it for tax loss harvesting is considered a wash sale. Note: This rule applies not only to straight stocks but also to exchange-traded funds (ETFs) and mutual funds.
SD Mayer
sdmayer.com › resources › wash-sale-rule-for-investors
Understanding the Wash Sale Rule for Investors
September 23, 2025 - The wash sale rule, regulated by the IRS, states that if you sell a stock or security at a loss, you cannot repurchase the same or a substantially identical investment within 30 days before or after the sale date.
Novel Investor
novelinvestor.com › home › what is the wash sale rule?
What Is The Wash Sale Rule? • Novel Investor
November 13, 2012 - So it added rules on what qualifies as a tax deduction and what doesn’t. A wash sale is when you sell a stock (bond or fund) at a loss and within 30 days before or after the sale you:
sale and repurchase of a security
Wikipedia
en.wikipedia.org › wiki › Wash_sale
Wash sale - Wikipedia
1 month ago - In the United States, the Internal Revenue Code defines a wash sale as having occurred if securities were acquired within 30 days before or after the date of sale (a 61-day "window"). Wash sale rules can be thought of as a specific application of the doctrine of economic substance.