Wash sales

Help Center > Investing > Investing with stocks: Special cases

Wash sales

The IRS prohibits taxpayers from claiming losses from wash sales for tax purposes. You can find your total wash sales for a specific account for the year in Box 1G of the applicable 1099 tax document.

You’ve executed a wash sale if you sell or trade stock or securities at a loss and within 30 calendar days, do one of the following:

Buy or acquire substantially identical stock or securities in any investment account, including IRAs
Acquire a contract or option to buy substantially identical stock or securities

Keep in mind, the wash-sale window applies to purchases 30 days before and after selling for a loss. Including the day of sale, this equals a 61-day window.

When selecting tax lots for securities to sell at a loss, be aware that wash sale rules still apply, so additional trading activity within 30 days before and after this sale may trigger a wash sale.

Example

An example of a wash sale is if you:

Purchase 100 shares of YOWL for $1,000
2 weeks later, sell them for $800
2 weeks after the sale, you repurchase 100 new shares of YOWL for $900
2 weeks after the repurchase, you sell that 100 YOWL shares for $1,300

Because of the wash sale rule, the $200 loss is disallowed and added to the cost basis of the repurchased shares. When you sell the repurchased shares any gain or loss from this trade is based on a cost of $1,100. ($900 original cost + $200 disallowed loss).

Wash sales apply across all of your investing accounts, including other Robinhood accounts and accounts held outside of Robinhood, and tracking them is the customer’s sole responsibility. We recommend consulting a tax professional to help identify wash sales across all your accounts and determine if your holdings are substantially similar or identical. Check out the IRS Publication 550 for more information.

Was this article helpful?

Reference No. 5195097

Still have questions? Contact Robinhood Support