How will a “wash sale” at year-end affect my tax liability?
A wash sale is when you sell stock at a loss and then repurchase that same stock within 30 days before or after the date of sale. When you have a wash sale, your loss is not allowed as a deduction until you sell the repurchased shares. For example, if you sell 100 shares of IBM stock on December 30, realizing a $10,000 loss, but on January 10 of the next year you buy 100 shares of IBM stock, then you are not able to deduct the $10,000 loss until you sell the new shares of IBM stock.
