A Wash Sale Rule I Just Learned

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End of year is coming, and many of us might be looking to harvest some tax losses…

I bought NVDA recently, before the price drops, and then bought some more within about two weeks of that. Then I sold some a week or two after my last purchase, in order to harvest a tax loss and yield some cash to keep my leverage low. BUT - the wash sale rule kicked in because of my second purchase. I didn’t realize that this would happen. I just thought that I couldn’t re-buy any more shares for 30 (31?) days, but the wash sale rule is more complicated than that. Once you make a second purchase, you can’t sell for 30 days.

I’m pretty sure this wouldn’t have happened if my second purchase had been made more than 30 days after the first.

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EdGrey,

Another important point to avoid a Wash Sale issue:

  1. You sell ABCD in a taxable account at a loss.
  2. Within ±30 days, you purchase ABCD in an IRA or other retirement account.

You lose the deduction for the loss.

Gene
All holdings and some statistics on my profile page
http://my.fool.com/profile/gdett2/info.aspx

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Once you make a second purchase, you can’t sell for 30 days.

Thanks Ed.

I’m curious how the wash sale rule is applied to multiple accounts? If a person has a standard brokerage account at three different brokers, does the rule apply across the board, or just to each broker?

Just curious.

Thanks.

Jeb

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does the rule apply across the board, or just to each broker?

Across the board: https://tickertape.tdameritrade.com/personal-finance/track-w…

Brokers will do what they can, but it’s still up to the taxpayer to catch different CUSIP, different account, and different brokerage “substantially identical securities.”

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