A wash sale is a US tax rule that stops you from claiming a tax loss if you sell an investment at a loss and buy the same — or a "substantially identical" — investment back within 30 days before or after the sale (a 61-day span centered on the sale date).
If a sale is a wash sale, the loss is not erased forever — it is disallowed for now and instead added to the cost basis of the replacement shares. So you get the benefit later, when you eventually sell those shares. Example (illustrative): you sell a stock for a $400 loss, then rebuy it a week later. The $400 loss is disallowed today and instead raises the cost basis of the new shares by $400, deferring the benefit.
The rule exists to stop investors from selling purely to book a tax loss while never really giving up the position. It commonly surprises people doing tax-loss harvesting near year-end, and it can be triggered across your own accounts — including buying the same security in a different account — and by reinvested dividends. "Substantially identical" is deliberately broad.
It is a US tax rule that disallows a loss deduction if you buy the same or a substantially identical investment within 30 days before or after selling it at a loss.
No — it defers it. The disallowed loss is added to the cost basis of the replacement shares, so you get the benefit later when you sell those shares rather than immediately. This is not tax advice.
This describes the US IRS rule specifically. Other countries have their own loss-deferral rules that can differ substantially. Confirm the rules for your jurisdiction or consult a professional.
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Educational research only — not investment advice.