Is the “wash sale” rule only for active traders?
The purpose of the “wash sale” rule is to prevent you from recognizing artificial losses. Generally, the rule does not generate problems for most investors. If your trading is minimal, maybe just a few transactions each year, you probably don’t have to worry about the wash sale rule. Active traders, on the other hand, depending on the volume of stocks they trade, must be very aware of the rule and its consequences. Important time frames The wash sale rule bars an investor from selling a stock for a loss and then re-purchasing the stock within a short period of time. The wash sale window starts 30 days before the sale of the stock. It includes the date of the sale and ends 30 days after the sale. The total period is 61 days. If an investor sells his or her stock at a loss and then buys a substantially identical replacement stock during this 61-day period, the loss is deferred until the replacement shares are sold. The pro rata loss is added to the cost basis of the replacement shares pu
