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Wash sale rules don't apply when stock is sold at a profit. [4] A related term, tax-loss harvesting is "selling an investment at a loss with the intention of ultimately repurchasing the same investment after the IRS 's 30 day window on wash sales has expired".
The wash-sale rule applies to stocks, bonds, mutual funds, ETFs, options, futures and warrants. However, the wash-sale rule does not apply to cryptocurrency, at least not yet.
Wash Sale Rules An important rule to understand when harvesting tax losses is the wash sale rule. If you take a loss on a security, you can’t buy the same or a “substantially identical ...
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.
[1] [2] The effectiveness of this approach is dependant of the tax rules in a particular jurisdiction. In the United States CBS News describes tax loss harvesting specifically as "selling an investment at a loss with the intention of ultimately repurchasing the same investment after the IRS's 30 day window on wash sales has expired." This ...
As you’re doing so, however, don’t get tripped up by the wash-sale rule. A wash sale occurs when you sell an asset for a loss but have purchased the same asset within 30 days before or after ...
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 ...
Capital losses realized when selling securities for less than you paid can be used to reduce income received from dividend-paying stocks - but only up to a point. The IRS will let you use up to ...