Wash Sale Rule 2026 Calculator — 30-Day Window IRC §1091

The wash sale rule (IRC §1091) blocks investors from claiming a tax loss when they repurchase the same or "substantially identical" security within 30 days before or after the sale. The full window spans 61 days — 30 before + sale day + 30 after. Disallowed losses are not lost; they get added to the cost basis of the replacement shares and the original holding period carries over.

How The 30-Day Window Works

The IRS counts calendar days, not trading days. If you sell ABC at a loss on June 15, the wash sale window runs from May 16 through July 15. Any purchase of ABC, ABC options, or a "substantially identical" security inside that window triggers §1091. Buying back even one share disallows the loss proportionally to how many shares were repurchased. The rule also catches purchases in your spouse's account and IRA — Rev. Rul. 2008-5 confirmed IRA repurchases permanently kill the loss with no basis recovery.

Basis Adjustment On Replacement Shares

When a wash sale is triggered, the disallowed loss attaches to the basis of the replacement shares. Example: you sell 100 shares at a $1,000 loss, then repurchase 100 shares for $5,000 inside the window. The disallowed $1,000 is added to the new basis, making it $6,000. When you eventually sell the replacement shares, the higher basis reduces your gain (or increases your future loss). The holding period of the original lot also tacks on, so the new shares may qualify for long-term treatment sooner. See IRS Publication 550 for full mechanics.

What Counts As Substantially Identical

"Substantially identical" is not defined by statute, but the IRS and courts treat these as triggers: the same stock (obvious), call options on the same stock, convertible bonds of the same issuer when conversion is near-automatic, and two ETFs tracking the same index (e.g., VOO and SPY both track S&P 500 — risky). Different companies in the same sector are not substantially identical. Bonds of the same issuer with materially different terms (coupon, maturity) are usually safe. When in doubt, swap to a different index family for the 31-day cooling period.

Common Wash Sale Mistakes

(1) Forgetting the IRA trap — repurchasing in an IRA permanently destroys the loss with no basis recovery (Rev. Rul. 2008-5). (2) Spousal accounts count — your spouse's purchase triggers your wash sale. (3) Dividend reinvestment (DRIP) is a buy — a single reinvested dividend can trigger the rule. (4) Year-end tax-loss harvesting — the 30-day window crosses into January, so December 20 sales need to wait until late January to repurchase. (5) Broker 1099-B may miss cross-account wash sales — brokers only report within one account, so cross-broker or IRA-taxable wash sales need manual reporting on Form 8949.

Last updated May 2026. Sources: IRC §1091, IRS Publication 550, Rev. Rul. 2008-5.