Beware the Wash Sale Rule

It sounds simple. Sell securities, such as stocks, bonds, ETFs, or mutual funds, in which you have a tax loss for 2023, claim the loss, and repurchase the assets.

Simple, except for the IRS’s pesky wash sale rule. The rule specifies that if you buy or acquire a substantially similar security within 30 days before or after you sell it, you cannot deduct any loss on the sale.


But you have a couple of strategies to use to follow the rules and claim your investment loss. Hold off buying the same or a very similar investment during the 61-day period starting the date of your original purchase and ending 30 days after your sale. If you can’t wait, reinvest in a security that isn’t substantially similar to the one you sold.

Consult your tax and financial professionals before using any investment sale or purchase as a tax strategy.