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A wash sale is a sale of a security (stocks, bonds, options) at a loss and repurchase of the same or substantially identical security (judging by CUSIP or Committee on Uniform Securities Identification Procedures numbers) shortly before or after. [1]
The wash-sale rule applies to both you and a spouse as if you were a unit. For example, you may not claim a loss while your spouse re-buys the asset within the 30-day window. This rule also ...
Immediately replacing an actively managed fund with an index fund or ETF would be fine, for example. But swapping an index fund for an ETF that tracks that same index would run afoul of the wash-sale rule, in that they’re substantially identical securities. In that instance, the IRS would disallow the loss.
The investor can employ a number of techniques to avoid triggering the wash sale rule. The investor can wait 30 days to repurchase the security. [10] The investor can purchase a security that is similar to the original, but that does not meet the IRS's definition of "substantially identical".
Continue reading ->The post What Investors Should Know About the Wash-Sale Rule appeared first on SmartAsset Blog. When an investment underperforms, tax-loss harvesting is a way to offset the tax ...
Special wash sale rules apply if the same or substantially similar asset is bought, acquired, or optioned within 30 days before or after the sale. [4] According to 26 U.S.C. §121, a capital loss on the sale of a primary residence is generally tax-exempt. [citation needed]. IRC 165(c) is a stronger source that limits the loss on the sale of a ...
Tax-loss harvesting could save you money as an investor if you’re trying to balance out capital gains with capital losses. But the IRS wash sale rule is designed to prevent people from unfairly ...
A 1256 Contract, as defined in section 1256 of the U.S. Internal Revenue Code, is any regulated futures contracts, foreign currency contracts, non-equity options (broad-based stock index options (including cash-settled ones), debt options, commodity futures options, and currency options), dealer equity options, and any dealer security futures contracts.