Wash-Sale Calculator

A wash sale occurs when you sell a security at a loss and buy a 'substantially identical' security within 30 days before or after the sale. The IRS disallows the capital loss under IRC Section 1091. The disallowed loss is not gone forever; it is added to the cost basis of the replacement shares, deferring the tax benefit until you ultimately sell those shares.

The IRS has not precisely defined substantially identical. For most purposes: the exact same stock or bond is always substantially identical. Options and warrants on the same stock are substantially identical. Shares of the same mutual fund are substantially identical. ETFs tracking the same index from the same provider may be substantially identical, while ETFs tracking different but similar indexes from different providers are generally not. The IRS looks at economic substance rather than technical differences.

No. The disallowed loss is added to the basis of the replacement security. When you eventually sell the replacement shares without triggering another wash sale, the higher basis produces a larger loss (or smaller gain), recovering the deferred tax benefit. The only scenario where the loss is permanently lost is if you hold the replacement shares until death (stepped-up basis) or donate them to charity.

The wash-sale window is 61 days total: 30 days before the sale, the sale day, and 30 days after the sale. If you buy a substantially identical security on any of these days, the wash-sale rule applies. You must track all purchases across all accounts you control, including IRAs and spouse's accounts.

The wash-sale rule can apply across accounts. If you sell a stock at a loss in a taxable account and buy the same stock in an IRA within the 30-day window, the loss in the taxable account is disallowed. However, the disallowed loss cannot be added to your IRA basis and is permanently lost, because IRA transactions do not have individual cost bases in the same way. This is an important trap to avoid.