Wash Sale Rules

What Is a Wash Sale?

Under Internal Revenue Service rules, you cannot deduct losses from sales or trades of stock or securities in a wash sale.

A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale if you also:

• Buy substantially identical stock or securities,
• Acquire substantially identical stock or securities in a fully taxable trade, or
• Acquire a contract or option to buy substantially identical stock or securities.

For more information about wash sales, see IRS Publication 550, "Investment Income and Expenses (Including Capital Gains and Losses)".

Notes about what the IRS considers "substantially Identical" can be found on page 59 of IRS Publication 550, linked above.