Investor Glossary-30-day wash ruleInvestor Glossary-30-day wash ruleInvestor Glossary-30-day wash ruleInvestor Glossary-30-day wash ruleInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

30-day Wash Rule

The HTML to link to this page
 

The 30-day wash rule is an IRS rule prohibiting the sale and repurchase of a security sold for purposes of claiming a tax loss within a 30-day period. The 30-day wash rule covers a 60-day window, 30 calendar days before and after the sale. The 30-day wash rule was put in place to keep taxpayers from simultaneously selling and repurchasing a substantially identical security, reaping a tax benefit while exposing them to no risk. In order to claim a tax loss, investors must risk the growth of their depreciated asset while not holding it for a time. The 30-day wash rule ensures taxpayers adhere to this exclusionary period or else their tax loss can be disallowed.

Investors should keep in mind that the security bought does not have to be the exact same as the one sold. According to the 30-day wash rule, if an investor repurchases a "substantially identical security", 30 days before or 30 days after the sale, they are in violation of the 30-day wash rule. The 30-day wash rule is in effect regardless of the sequence of the transactions.

For more information on the 30-day wash rule please see IRS publication 550.



Rate this 30-day wash rule definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: 401a, real GDP, inflation, command economy, in escrow, cancelled check, ex-dividend, 1035 exchange, required rate of return, Key Rate Duration, stock market close, margin rate, average price per share, current ratio, deferred tax, Zero Cost Collar, stock split, EBITDA, implied volatility, LIBOR, balance sheet, risk management, FTSE, deferred revenue, per diem, labor relations, retained earnings, debt service coverage, phantom income, ex-dividend date, liquidity ratio, FICO score, 1031 exchange, annual return, option premium, covered put, 144a, wholly-owned subsidiary, irrevocable trust, APR, reverse mortgage, minority interest, open position, VIX, quality assurance, class C shares, dividends payable, limit order, diluted share


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use