On 2/23 I bought XYZ in both my regular account and my IRA.
XYZ is now showing a loss. I would like to take the loss, but not have
it disallowed due to the wash sale.
If I sell XYZ in my regular account today (3/12), is the loss subject to
the wash sale?
What if I sell it on say 3/29?
What if I sell the XYZ shares in my IRA today? Then can I sell the
regular shares and avoid the wash sale rule?
Not sure about this one. I'll leave it to the experts.
That would not be a wash sale as long as you waited an additional 30 days past
3/29 to buy any more shares in XYZ.
If you sold all of your shares in XYZ no matter where held and then did not buy
any more until more than 30 days later, you would not have a wash sale.
Are you asking if you only sold the IRA shares? That won't generate a tax loss.
You are correct in that the wash sale rules are complicated. And even more so
when you mix transactions in taxable and tax-deferred or tax-free accounts.
Personally, I avoid doing anything to trigger the wash sale rules as I think
the hassle is not worth the effort. Certainly not for the sums I have to
Where I find this most difficult is with bond mutual funds. They often
pay monthly dividends, and if you automatically reinvest them, you can end up
with a wash sale. I've gone so far as to have more than one similar sort of
bond fund so I can more easily just sell the entire position of just one of
them if I want to move money around. (Speaking of perverse tax incentives.)
In any case, by the time you get a good set of answers to your question it may
be a moot point. Unless this is a substantial transaction, I would suggest
either waiting out the 30 days or selling all of the shares and then waiting
30 days to re-buy. I assume you still like the long-term prospects of XYZ.
In that case, you may just want to forgo harvesting a temporary dip in the
price. Unless this is somehow a substantial enough write-off to be worth the
I think I've sometimes seen people express the opinion that two
different index funds that track the same index are "substantially the
same" and would trigger wash sales between them.
This seems like a stretch to me, but I'm not sure what the IRS opinion
The clock starts. You must not buy for 30 days. On day 31, there is no
wash sale. Until then, there is a potential wash sale, but of course,
that's the case any time you sell at a loss.
Why did I ignore the IRA? Because those were not "replacement shares",
they were in the account at the same time the taxable acct shares were
Looking forward, keep in mind, it's best to avoid mixing same stock
purchases among taxable and non-taxable accounts. An IRA purchase that
washes the loss in a taxable account causes you to lose that tax loss
The clock goes backward and forward. Shares purchased within 30 days in
either direction are considered replacement shares.
This is to prevent you from getting around the wash sale rule simply by
buying the replacement shares the day before you sell instead of the day
That's why I will wait until about 3/29 or so. I assume that establishes
the loss date. Since no shares were purchased 30 days BEFORE I take the
LOSS, I am home free, assuming I do not re-buy the shares within the
NEXT 30 days.
Can you confirm my thinking here?