A sale is considered a wash sale if, within 30 days before/after the losing sale, a “substantially identical” stock is purchased. I’m a little concerned that the “before” part is ambiguous.
Obviously, the “before” is there to avoid someone who owns 1 share of stock with a basis of $100 buying an additional share at $90, and then immediately selling the original share at $90.
However, a very literal reading suggests that you would also trigger it with a losing position you’re in for <30 days. That is, buy at $100 one day (having had nothing to do with it for 30 days prior), sell at $90 the next, and have nothing to do with it for the next 30 days. After all, you made a purchase the day before the losing sale, and wouldn’t literally the exact same share(s) be considered “substantially identical”?
I searched r/investing’s history for “wash sale” a bit but didn’t find this question, probably because it’s obvious to everyone else and I’m being ridiculous, hahaha.
wash sale question, probably paranoia – RobinHood – Reddit Feed
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