The wash-sale rule is a rule that disallows a tax loss on a security if you buy the same or a substantially identical security within 30 days before or after the sale. The disallowed loss gets added to the basis of the replacement shares, so you don’t lose it entirely — you just defer it. The rule applies across all your accounts, including your spouse’s accounts and IRAs. A frequent trap is dividend reinvestment programs that quietly buy replacement shares and accidentally trigger the rule. If you harvest tax losses, a wealth advisor can help you avoid wash sales while keeping your target allocation.
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