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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →If you sold stock at a loss and bought the same or substantially identical stock within 30 days before or after that sale, you generally have a wash sale. The loss is not deductible on the sale. For replacement shares bought in a taxable account, add the disallowed loss to those shares’ basis so the deduction is generally deferred until you sell them. A purchase in an IRA or Roth IRA can also trigger the rule, but the normal replacement-basis increase does not apply.
Review every purchase across your accounts, match only the replacement shares covered by the rule, and report the adjustment on Form 8949. A missing wash-sale entry on your broker’s Form 1099-B does not make the loss deductible.
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First, confirm whether the 30-day wash-sale rule applies
Under the federal rule described in IRS Publication 550 (2025), the relevant window runs from 30 days before the loss sale through 30 days after it. An acquisition during that window can trigger a wash sale when it involves the same or substantially identical stock or securities. The rule can also cover certain contracts or options and purchases made in an IRA or Roth IRA.
The date that matters is the trade’s acquisition or sale date shown in your confirmations, not merely the date cash settled. Start with the date you sold at a loss, then inspect the 30 calendar days on both sides. Waiting 30 days after the sale does not resolve the issue if you bought replacement shares during the 30 days before the sale.
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What “substantially identical” means
The IRS says the determination depends on all the facts and circumstances. The straightforward case is buying back the same ticker or security. Different corporations’ securities ordinarily are not substantially identical, but particular facts can produce a different result; convertible preferred stock and common stock may also require analysis. Do not assume that every pair of similar funds or exchange-traded funds is automatically inside or outside the rule. See the IRS discussion in Publication 550 and the wash-sale definition in the 2025 Schedule D instructions.
Look beyond the account where you sold
Include taxable brokerage accounts, traditional IRAs, Roth IRAs and relevant activity by a spouse or a controlled corporation. IRS Publication 550 uses a spouse’s or controlled corporation’s purchase as an example of activity that can matter. A broker generally cannot see all of those transactions when preparing your 1099-B.
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Calculate how much of the loss is disallowed
A wash sale does not necessarily disallow the entire loss. The affected amount is tied to the replacement shares that match shares sold at a loss. If you sold 500 shares at a loss and bought back only 120 potentially matching shares, the rule generally applies to the 120 matched shares, with the remaining 380 shares’ loss considered separately.
Match replacement shares in purchase order
Use the purchase-order matching approach described by the IRS: identify purchases during the window and match them against the loss-sale shares in the applicable order. Record the number of shares sold, each replacement purchase, and the loss per share or lot. The disallowed amount may therefore be split among several replacement lots rather than appearing as one adjustment.
IRS numerical example
Publication 550 gives an example in which shares originally costing $1,000 are sold for $750, producing a $250 loss. The investor buys replacement shares for $800. The $250 loss is disallowed for the sale and added to the replacement shares’ cost, producing a $1,050 adjusted basis. The IRS describes the result this way: “This adjustment postpones the loss deduction until the disposition of the new stock or securities.”
Understand the consequence by account type
| Where the replacement shares were bought | Immediate result | What happens to basis |
|---|---|---|
| Taxable brokerage account | The matched loss is not deductible on the original sale. | Add the disallowed amount to the basis of the replacement shares; the deduction is generally deferred until those shares are sold. |
| Traditional IRA or Roth IRA | The purchase can trigger the wash-sale rule even though it is a different account type. | The regular taxable-account basis increase does not apply to the IRA or Roth IRA acquisition under the IRS guidance. Obtain advice on the resulting tax treatment. |
The IRA distinction is important. Do not automatically apply a taxable-account basis adjustment to an IRA or Roth IRA purchase, and do not assume that moving the replacement purchase into a retirement account preserves the loss.
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What to do now: a transaction-by-transaction process
- Collect the loss-sale confirmation. Save the trade date, number of shares, proceeds, original basis, security identifier, account type and the broker’s reported wash-sale amount, if any.
- Export the surrounding trade history. Pull all purchases of the same or potentially substantially identical security from the 30 days before and after the sale. Include every taxable and retirement account you control and relevant spouse or controlled-entity activity.
- List each replacement lot. For every purchase, record its date, share quantity, cost, account and security identifier. Keep options, contracts or other transactions that could represent an acquisition in the review rather than looking only for identical ticker symbols.
- Match shares and compute the adjustment. Apply the IRS purchase-order matching method. Determine how many loss-sale shares are matched and allocate the corresponding loss to those replacement shares. Do not disallow the entire loss merely because a smaller number of shares was repurchased.
- Adjust taxable-account basis. For replacement shares outside an IRA or Roth IRA, add the disallowed loss to the matched lots’ basis. Preserve the calculation with your confirmations so the adjusted basis is used when those lots are eventually sold.
- Prepare the federal return entry. Report the sale on the appropriate Part I or Part II of Form 8949, depending on the holding period and reporting category. Follow the 2025 Form 8949 instructions: enter code W in column (f) and enter the disallowed loss as a positive adjustment in column (g). Carry the resulting totals to Schedule D as applicable.
- Reconcile imported tax data. If tax software imported a broker adjustment or already included it in a transaction summary, compare that entry with your worksheet before filing. Entering the same adjustment twice can distort the reported gain or loss.
How Form 1099-B fits into the answer
Broker reporting is useful but narrower than your responsibility as the taxpayer. Under the 2026 Form 1099-B instructions, a broker generally reports a wash-sale amount when covered securities with the same CUSIP are bought in the same account. That means a 1099-B entry may omit a purchase in another account, a spouse’s account, a controlled corporation, a retirement account or a transaction involving a potentially substantially identical security with a different identifier.
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Common situations and their likely treatment
| Situation | Why it matters | Action |
|---|---|---|
| Same security bought 10 days after the loss sale | It is inside the 30-days-after portion of the window. | Match the replacement shares and report the disallowed loss. |
| Same security bought 20 days before the loss sale | The pre-sale side of the window also counts. | Include the earlier purchase when matching shares. |
| Only part of the sold position was repurchased | The number of replacement shares can limit the amount affected. | Apply share matching; do not automatically disallow the entire loss. |
| Replacement shares bought in another taxable account | The broker that handled the sale may not report the cross-account match. | Combine account records and make the taxpayer-level adjustment. |
| Replacement shares bought in an IRA or Roth IRA | The acquisition can trigger the rule, but the normal basis increase is unavailable. | Flag the account type and obtain tax advice for the return. |
| Different but potentially substantially identical security | The IRS uses a facts-and-circumstances test rather than a universal ticker rule. | Analyze the securities’ characteristics rather than relying only on CUSIP or ticker. |
| No broker wash-sale flag | Same-account, same-CUSIP broker reporting may not capture the transaction. | Use your complete trade history and report any required adjustment. |
Holding-period and basis records you should preserve
Keep the original sale confirmation, every replacement confirmation, account statements, basis reports, your matching worksheet and the filed Form 8949. For each affected replacement lot, show the original purchase cost, the allocated disallowed loss and the resulting adjusted basis. When you later sell that lot, give the adjusted figure to your preparer or enter it in your tax software instead of accepting an unverified imported basis.
Maintain records long enough to support the later disposition of replacement shares and any return on which the basis affects tax. A wash-sale adjustment can move the tax consequence into a later year, so deleting the original worksheet after filing the loss-sale return can create a basis problem years later.
Reporting details that are easy to get wrong
- Use a positive column (g) adjustment. Form 8949 code W identifies the wash-sale adjustment; the disallowed loss is entered as a positive number that modifies the reported result.
- Choose the correct Form 8949 section. Part I and Part II correspond to short-term and long-term categories and the applicable reporting basis boxes. Use the instructions for the tax year being filed.
- Do not report only the broker’s number when your records show more. Cross-account and related-party purchases can create an adjustment absent from 1099-B.
- Do not create an adjustment when no qualifying replacement purchase exists. A sale at a loss by itself is not a wash sale; the acquisition and identity tests must be satisfied.
- Do not treat exactly 30 days as a universal safe harbor. Count both directions from the sale and review options, contracts and related accounts.
When professional review is sensible
Consider a tax professional when the replacement purchase was in an IRA or Roth IRA, when several accounts or family members were involved, when you traded options or contracts, or when the securities may be substantially identical without being the same ticker. The federal guidance in Publication 550 and the Schedule D instructions supplies the framework, but a personal conclusion requires your dates, lots, quantities, security characteristics, account types and tax-year facts.
Use the instructions for the filing year you are actually reporting. The links above identify the 2025 IRS publications and Form 8949 instructions, while the broker-reporting instructions cited are for 2026; forms and instructions can change.
Quick Recap
A practical filing checklist
- Identify the exact loss-sale date and security.
- Search 30 days before and 30 days after that date.
- Include taxable accounts, IRAs, Roth IRAs, spouse activity and controlled entities.
- Check same-security purchases, potentially substantially identical securities, options and contracts.
- Match replacement shares and calculate only the affected loss.
- Add the adjustment to taxable replacement-lot basis, but not as a routine IRA/Roth IRA basis increase.
- Compare every 1099-B entry with confirmations and statements.
- Report Form 8949 code W with a positive column (g) adjustment and carry it to Schedule D.
- Store the worksheet and adjusted-basis records for the later sale of replacement shares.
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