Wash-Sale Rule, Explained Simply
Sell at a loss and rebuy within 30 days? The IRS puts your write-off on hold.
The wash-sale rule blocks you from claiming a tax loss if you sell an investment and buy the same one back within 30 days.
The idea is simple. The IRS does not want you selling a stock just to grab the tax write-off, then buying it right back so you never really let go of it. So they built a fence around that move.
The window is 61 days total. It covers the 30 days before your sale, the day of the sale, and the 30 days after. If you buy the same or a nearly identical security anywhere in that stretch, the loss is disallowed for now. The good news is the loss is not gone forever. It gets added to the cost of your new shares, so you recover it later when you finally sell for good.
A common trap is your dividend reinvestment or an automatic 401k purchase quietly triggering the rule without you noticing. If you are selling for a loss on purpose, it pays to pause those repurchases first.
Bottom line: If you sell at a loss, wait 31 days before buying it back, or the tax benefit gets put on hold.
This is general education, not personal investment or tax advice.
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