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There are no clear guidelines on what constitutes a substantially identical security. If you are currently in a higher tax bracket, you can use realized capital losses for three purposes: By using this service, you agree to input your real email address and only send it to people you know. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. In any event, had you not sold that lot of shares, the way I understand it you still would have had a wash sale, just on the other lots. It's important to note that you cannot get around the wash-sale rule by selling an investment at a loss in a taxable account, and then buying it back in a tax-advantaged account. responsible for the content and offerings on its website. And that gain is considered aconstructive sale. Once the wash-sale rule wait period ends, sell your shares and collect your loss. There are some simple techniques that you can use to take losses and yet maintain a position in the market until the wash-sale period has expired. When you enroll in the tax-loss harvesting feature, the enrollment is on an account basis and does not apply to other TDAIM portfolios you may have. A capital gains tax is a levy on the profit that an investor makes from the sale of an investment such as stock shares. Specifically, TDAIM determines if the loss amount is significant enough before placing a tax-loss trade. 2023 Charles Schwab & Co., Inc. All rights reserved. The wash-sale rule keeps investors from selling at a loss, buying the same (or "substantially identical") investment back within a 61-day window, and claiming the tax benefit. If you buy a stock in a margin account, your broker can lend your shares to another investor who wants to short the stock. Plus, the loss cannot be deferred in the way described above (by increasing the cost basis of the purchase). According toRevenue Ruling 2008-5, IRA transactions can also trigger the wash-sale rule. Applies to U.S. exchange-listed stocks, ETFs, and options. Information that you input is not stored or reviewed for any purpose other than to provide search results. I think you did not successfully specify the exact lots to sell at TDAmeritrade. And if you have multiple accounts across one firm or several firms, you need to keep track of relevant transactions within all of the accounts, including any individual retirement accounts (IRAs). Wash sale rule clarification : r/tdameritrade - reddit.com Ameritrade Locations Near Palmdale, CA-Investments | superpages.com Please excuse the option jargon! It is a violation of law in some jurisdictions to falsely identify yourself in an email. If you're unaware of wash sales, the wash-sale rule, and its 61-day wait period, you could stymie your legitimate efforts to reduce your taxes. If you close your position, say mid-December 2020, and repurchase the stock in January 2021before the end of the 30-day window, youve technically made a wash sale. But arent you just swapping one price risk for another?