wash-sale rule

wash-sale rule definition - finance
A tax rule that says if stock or bond is sold and a loss is taken and then the same security is repurchased within 30 days, the sale may be considered a wash and the loss canÂ’t be immediately claimed for tax purposes. However, the disallowed amount from the wash sale can be added to the cost of the repurchased securities, which helps reduce the amount of taxable profit from a future sale.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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