Wash Sale

The buying and selling of the same or a similar asset within a short period of time.

A fictitious type of arrangement whereby a Broker, upon receiving an order from one individual to purchase and an order from another individual to sell a certain amount of a particular stock or commodity, transfers it from one principal to the other and retains the difference in value.

For the purposes of Income Tax, losses on a wash sale of stock may not be recognized as capital losses if stock of equal value is obtained within thirty days prior or subsequent to the date of sale.

Various stock exchanges disallow this practice because the orders to buy and sell should be executed separately to the advantage of each of the broker's clients.

Wash sale

Purchase and sale of a security either simultaneously or within a short period of time, often in order to recognize a tax loss without altering one's position. See: Tax selling.

Wash Sale

1. An illegal act in which an investor buys and sells the same security at the exact same time, especially through two different brokerages. This results in neither profit nor loss for the investor, but creates the impression that the security is undergoing heavy trading, which could drive up the price or generate unwarranted interest.

2. An illegal act in which an investor takes essentially the same position as one he/she closed at a loss less than 30 days earlier. Wash sales are intended to provide the investor with a write-off (through the loss) without fundamentally changing the position he/she holds.

wash sale

The illegal purchase or repurchase of an asset within 30 days of the sale date of a basically identical asset that was sold in order to take a tax loss. For example, if an investor sold a security at a loss and then immediately repurchased the same security or a basically identical security, the Internal Revenue Service would consider the transaction a wash sale.

Wash sale.

When you purchase and then sell or sell and then repurchase the same security or a substantially similar security within 30 days, the double transaction is called a wash sale.

As an individual investor, you can't use any capital losses that the sale produces to offset capital gains from selling other securities in your portfolio.

For example, if you sold 200 shares of an underperforming stock on December 15 intending to use the loss on that sale to offset gains on other sales, your offset would be invalid if you repurchased the stock before the following January 15. But if you repurchased on January 16, the offset would be valid. In fact, avoiding wash sales is an important part of tax planning.

In a broader use of the term, purchasing and then quickly reselling a security may be described as a wash sale, whether the transaction is part of an innocent trading strategy or a pump-and-dump scheme.

Wash Sale

The purchase of substantially similar stock or other securities within 30 days before or after the sale of the similar stock or security at a loss. A taxpayer cannot claim a wash sale loss; instead, the loss is added to the basis of the most recently purchased substantially similar securities.

单词	wash sale
释义	wash sale wash sale n. The sale and repurchase of a security within a short period of time, especially in order to realize a loss that can be deducted from taxable income. wash sale n (Stock Exchange) US the illegal stock-exchange practice of buying and selling the same securities at an inflated price through a colluding broker to give the impression that the security has a strong market Wash Sale Wash Sale The buying and selling of the same or a similar asset within a short period of time. A fictitious type of arrangement whereby a Broker, upon receiving an order from one individual to purchase and an order from another individual to sell a certain amount of a particular stock or commodity, transfers it from one principal to the other and retains the difference in value. For the purposes of Income Tax, losses on a wash sale of stock may not be recognized as capital losses if stock of equal value is obtained within thirty days prior or subsequent to the date of sale. Various stock exchanges disallow this practice because the orders to buy and sell should be executed separately to the advantage of each of the broker's clients. Wash sale Wash sale Purchase and sale of a security either simultaneously or within a short period of time, often in order to recognize a tax loss without altering one's position. See: Tax selling. Wash Sale 1. An illegal act in which an investor buys and sells the same security at the exact same time, especially through two different brokerages. This results in neither profit nor loss for the investor, but creates the impression that the security is undergoing heavy trading, which could drive up the price or generate unwarranted interest. 2. An illegal act in which an investor takes essentially the same position as one he/she closed at a loss less than 30 days earlier. Wash sales are intended to provide the investor with a write-off (through the loss) without fundamentally changing the position he/she holds. wash sale The illegal purchase or repurchase of an asset within 30 days of the sale date of a basically identical asset that was sold in order to take a tax loss. For example, if an investor sold a security at a loss and then immediately repurchased the same security or a basically identical security, the Internal Revenue Service would consider the transaction a wash sale. Wash sale. When you purchase and then sell or sell and then repurchase the same security or a substantially similar security within 30 days, the double transaction is called a wash sale. As an individual investor, you can't use any capital losses that the sale produces to offset capital gains from selling other securities in your portfolio. For example, if you sold 200 shares of an underperforming stock on December 15 intending to use the loss on that sale to offset gains on other sales, your offset would be invalid if you repurchased the stock before the following January 15. But if you repurchased on January 16, the offset would be valid. In fact, avoiding wash sales is an important part of tax planning. In a broader use of the term, purchasing and then quickly reselling a security may be described as a wash sale, whether the transaction is part of an innocent trading strategy or a pump-and-dump scheme. Wash Sale The purchase of substantially similar stock or other securities within 30 days before or after the sale of the similar stock or security at a loss. A taxpayer cannot claim a wash sale loss; instead, the loss is added to the basis of the most recently purchased substantially similar securities.
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