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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
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To: Elroy who wrote (5770)2/26/2023 1:33:20 PM
From: TheNoBoB  Read Replies (2) of 5810
 
Does buying a stock within 30 days in a retirement account trigger a wash rule violation of a trade in a regular account?
The IRS, in Publication 550, very clearly says it does:

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A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

Buy substantially identical stock or securities,

Acquire substantially identical stock or securities in a fully taxable trade,

Acquire a contract or option to buy substantially identical stock or securities, or

Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.



If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale.

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There's no room for interpretation there.


And it's the worst kind of wash sale, since once the cost basis adjustment gets locked into the IRA, the loss is gone forever. Wash sales in a cash/margin account can eventually be recovered if so desired, but in the IRAs they're forever lost.
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