Think avoiding a wash sale is as simple as waiting 30 days after selling a stock at a loss? 📉 Think again. The IRS wash-sale rule creates a 61-day window that looks both backward and forward, and it can reach across accounts your broker may not see. 🎧

In this episode of 𝗨𝗹𝗹𝘂𝗥𝗮𝗱𝗶𝗼.𝗔𝗜, we unpack Abhi Vishwas's deep dive into Internal Revenue Code §1091 and IRS Publication 550 to demystify how wash sales actually work in the real world.

🔍 𝗞𝗲𝘆 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗖𝗼𝘃𝗲𝗿𝗲𝗱:

• 𝗧𝗵𝗲 𝟲𝟭-𝗗𝗮𝘆 𝗪𝗶𝗻𝗱𝗼𝘄: Why the rule covers 30 days before the sale, the day of the sale, and 30 days after the sale.

• 𝗪𝗵𝗲𝗿𝗲 𝘁𝗵𝗲 𝗟𝗼𝘀𝘀 𝗚𝗼𝗲𝘀: How a disallowed loss is generally added to the basis of replacement shares in taxable accounts, and why acquiring substantially identical stock in an IRA or Roth IRA can permanently eliminate the tax benefit of the loss under Rev. Rul. 2008-5.

• 𝗪𝗵𝗮𝘁 𝗬𝗼𝘂𝗿 𝗕𝗿𝗼𝗸𝗲𝗿 𝗠𝗶𝘀𝘀𝗲𝘀: Why broker reporting does not necessarily capture wash sales across different accounts, brokers, or other acquisition sources, leaving the taxpayer responsible for identifying and reporting wash sales that are not reflected on Form 1099-B.

• 𝗛𝗶𝗱𝗱𝗲𝗻 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗧𝗿𝗶𝗴𝗴𝗲𝗿𝘀: How RSU vesting, ESPP purchases, dividend reinvestments (DRIPs), call options, and assigned put options can potentially create wash-sale consequences.

• 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 & 𝗘𝘅𝗰𝗲𝗽𝘁𝗶𝗼𝗻𝘀: How wash sales are reported using Form 8949 Code W, along with special rules and exceptions involving certain money market funds under Rev. Proc. 2023-35 and §475(f) mark-to-market elections for qualifying traders.

Master the mechanics of tax-loss harvesting and understand the hidden tax traps that can affect your portfolio. 🚀📈

𝗟𝗘𝗚𝗔𝗟 𝗗𝗜𝗦𝗖𝗟𝗔𝗜𝗠𝗘𝗥

This episode and description are provided for general educational and informational purposes only and do NOT constitute tax, legal, accounting, financial, or investment advice. Author Abhi Vishwas and publisher OTS Ullu / UlluRadio.AI are not licensed tax advisors, CPAs, enrolled agents, or financial advisors, and this content has not been professionally reviewed.

Tax laws and IRS rules can change over time. Before taking any action or making tax decisions, consult a qualified tax professional, such as a CPA, enrolled agent, or tax attorney, regarding your specific situation.

𝗖𝗥𝗘𝗗𝗜𝗧𝗦

Based on the guest article"Wash Away Wash Sale Worries" written by Abhi Vishwas and published on OTS Ullu:

⁠https://otsullu.com/articles/wash-away-wash-sale-worries/

Statutory references and guidance include Internal Revenue Code §§1091, 1092, and 475; IRS Publication 550; Rev. Rul. 2008-5; Rev. Proc. 2023-35; IRS Form 8949; and the Revenue Act of 1921.

𝗖𝗢𝗣𝗬𝗥𝗜𝗚𝗛𝗧

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