noun Internet Slang

wash sale

WOSH SAYL · noun · informal

Selling at a loss then rebuying the same security within 30 days.

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Definitions

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A wash sale occurs when an investor sells a security at a loss and buys the same or a substantially identical one within 30 days before or after, which disallows the tax deduction for that loss. The IRS defines a 61-day window.

“Selling then rebuying the next day triggered a wash sale and I lost the tax write-off.”
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wash sale In A Sentence

Selling then rebuying the next day triggered a wash sale and I lost the tax write-off.

Origin & Usage

Long-standing U.S. tax term; 'wash' implies the transaction nets out to no real change.

Variants wash-salewash sale rule
Tags #finance#stocks#wsb#tax#rules

People Also Ask

What is a wash sale?

It's when you sell a security at a loss and buy the same or a substantially identical one within 30 days before or after the sale, which causes the IRS to disallow the tax deduction on that loss.

How long is the wash sale window?

It's a 61-day window: the 30 days before the sale, the day of the sale, and the 30 days after.

Why does the wash sale rule matter?

If you trip it, you can't claim the loss for a tax write-off; the disallowed loss instead gets added to the cost basis of the replacement shares.

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