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Tax statute

Wash Sale Rule

A plain reading of Internal Revenue Code section 1091. This is not tax advice, not a lot-matching calculator, and not a trading strategy.

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What is the wash sale rule?

Internal Revenue Code section 1091 disallows a loss from the sale of stock or securities if the taxpayer acquires, or enters a contract or option to acquire, substantially identical stock or securities within 30 days before or after the sale (a 61-day window). The disallowed loss is generally added to the basis of the replacement position. This is a tax statute, not investment advice and not a Belvedere ranking.

Does the wash sale rule apply to IRAs?

Treasury and IRS guidance has treated certain IRA replacement purchases as capable of triggering a wash sale, with the loss permanently disallowed in some cases. That is a tax-administration issue. Belvedere does not prepare returns.

Internal Revenue Code section 1091 disallows a loss from the sale of stock or securities if the taxpayer acquires, or enters a contract or option to acquire, substantially identical stock or securities within 30 days before or after the sale (a 61-day window). The disallowed loss is generally added to the basis of the replacement position. This is a tax statute, not investment advice and not a Belvedere ranking.

Statute elements

Summary of 26 U.S.C. § 1091 for orientation. The Code and IRS publications control. Not a substitute for a tax professional.
ElementContentNote
Statute26 U.S.C. § 1091Loss on stock or securities
Window30 days before the sale through 30 days after (61 days including the sale date)Calendar days, not trading days
ReplacementAcquiring, or entering a contract or option to acquire, substantially identical stock or securitiesIncludes certain options
EffectThe loss is disallowed for that sale and generally added to the basis of the replacementNot a “the trade never happened” rule
BelvedereDoes not compute wash-sale adjustments on company pagesFilings show issuer economics, not your tax lot

Why it appears next to company research

Search lumps “wash sale” with day-trading tactics. For Belvedere, the adjacent fact is simpler: issuer financials on a company page do not know your tax lots. A 10-Q does not compute your disallowed loss.

Related brokerage definitions: pattern day trader rule. Related research object: how to read a 10-Q.

Stock informationHow the stock market worksStock market hoursPattern day trader ruleHow to read a 10-QLatest 10-Q filingsResearch vs trading

Frequently asked questions

What is the wash sale rule?
Internal Revenue Code section 1091 disallows a loss from the sale of stock or securities if the taxpayer acquires, or enters a contract or option to acquire, substantially identical stock or securities within 30 days before or after the sale (a 61-day window). The disallowed loss is generally added to the basis of the replacement position. This is a tax statute, not investment advice and not a Belvedere ranking.
Does the wash sale rule apply to IRAs?
Treasury and IRS guidance has treated certain IRA replacement purchases as capable of triggering a wash sale, with the loss permanently disallowed in some cases. That is a tax-administration issue. Belvedere does not prepare returns.
Is a wash sale the same as a day trade?
No. A day trade is a same-day round trip in a brokerage account. A wash sale is a tax-lot matching rule over a 61-day window. You can have one without the other.

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