A "wash sale" happens when a trader sells shares at a loss and buys similar ones within a 61-day period (30 days before and after the sale). The loss is added to the cost basis of the replacement shares. When those shares are sold, the disallowed loss is recognized. The holding period of the original shares is combined with the new ones'. For more info, visit our website.
Read MoreThe IRS defines a wash sale as selling stock at a loss within 30 days before or after buying "substantially identical" stock. The loss is deferred until replacement shares are sold. The original shares' holding period is added to the new shares' holding period. Visit MEXEM website for more info on wash sales.
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