Wash Sale

What does it Mean? An illegal transaction an investor makes by simultaneously buying and selling a security through two different brokers, thereby creating the illusion of activity. Investors do this to try and recognize a tax loss without actually changing their position.
Investopedia Says... The effectiveness of this strategy has been greatly diminished with the implementation of the IRS 30-day wash rule, where a taxpayer cannot recognize a loss on an investment if that investment was purchased within 30 days of sale (before or after sale). 

Terms Related Links

Accommodation Trading
Crystallization
Daisy Chain
Paper Profit (or Loss)
Tax Selling
Wash
Wash Sale Rule

Terms Related Links
Selling Losing Securities For A Tax Advantage - Tax-loss harvesting can help you to reduce taxes on your portfolio gains, but make sure you know the rules!



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