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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
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To: Privately who wrote (5793)4/3/2024 10:30:24 AM
From: TheNoBoB1 Recommendation

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Privately

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Re: IRA triggering wash sales

It seems to me that because the IRA is tax exempt, the cost basis adjustments from wash sales don't really matter
In a vacuum, yes, but that post was about a wash sale in a taxable account being triggered by a buy in an IRA. If you buy and then sell for a loss in a taxable account, then buy again in the IRA within the wash sale window, a wash sale is triggered and the loss is disallowed in the taxable account -- you can't claim it on your taxes -- and that loss amount becomes an adjustment to the cost basis of the subsequent buy trade. As you correctly point out, the cost basis doesn't matter in the IRA so the adjustment doesn't help you at all there. You've lost money in your taxable account and the loss has been transferred into the IRA where you can't deduct it.
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