Understanding the wash-sale rule to maximize tax savings

Understanding the wash-sale rule to maximize tax savings

The wash-sale rule is an IRS regulation designed to prevent investors from claiming a tax loss on a security if they purchase the same or a substantially identical investment within 30 days before or after selling it at a loss. While tax-loss harvesting can help offset capital gains and reduce taxable income, a wash sale delays that tax benefit by adding the disallowed loss to the cost basis of the newly purchased investment. The rule applies to a variety of securities, including stocks, ETFs, m