™30-second takeaway
What Is a Wash Sale?, in one thought.
Understand when a loss sale and a substantially identical replacement can trigger the U.S. wash-sale rule.
See how each idea connects before exploring the details below.
Put the idea into numbers.
You sell 100 shares for a $1,000 loss and buy 40 substantially identical shares 19 days later. A simplified taxable-account illustration potentially matches 40 shares and defers $400 of the loss into their adjusted basis.
Where understanding breaks down.
Checking only the account where the loss occurred. Replacement purchases through another broker, a spouse or an IRA may matter even when one Form 1099-B does not show the whole pattern.
Remember this.
Test the dates, investment identity, matched quantity, account type and basis treatment—then verify the result under current tax guidance.
The rule in plain English
A wash sale can occur when stock or securities are sold at a loss and substantially identical stock or securities are bought—or acquired through a contract or option—within 30 days before or 30 days after the sale. The sale date is part of the full 61-day window.
The loss is usually deferred
In a taxable account, the disallowed loss is generally added to the basis of the replacement shares. That adjustment usually postpones recognition rather than making the economics of the loss disappear.
Substantially identical matters
The rule does not apply merely because two investments are related, and it cannot always be avoided by changing a ticker. Facts such as the issuer, rights, convertibility, fund exposure and contract terms can matter.
Start with the records
Track acquisition dates, sale dates, share lots, adjusted basis and every account that may hold a replacement. Brokerage reporting can help, but a taxpayer remains responsible for a complete return.
Use this as a foundation, then verify current rules and product details with primary sources and regulated providers before acting.
Primary sources and further reading
Verify the current tax rules.
Tax law, classifications and reporting requirements can change. Use current IRS guidance and a qualified tax professional for your circumstances.
Connect the concept
Go from explanation to application.
Continue with a related definition and an educational calculator that makes the numbers easier to see.