The National Directory of Certified Public Accountants

Ask A CPA - Capital Gains & Losses

Wash Sale

Losses from Wash Sales are disallowed by the IRS and the amount of the loss is added to the cost basis of the repurchased shares on a per share basis. The holding period is also adjusted to include the days the security was held before the original sale. When an investor sells shares at a loss and then repurchases substantially identical shares within 61-day window (30 days before and/or after the date of sale, it is called a wash sale.

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