Wash Sales

What this video covers

• Why the wash sale window is 61 days total, not 30, and how counting backwards and forwards works on test day
• What counts as substantially identical securities, including why call options and convertible bonds trigger the rule while different stocks in the same industry do not
• How a disallowed loss is deferred in a taxable account by adding it to the replacement shares' cost basis
• Why the deferred loss reduces future taxable gains when the replacement shares are eventually sold
• What makes an IRA or Roth IRA replacement purchase permanently disastrous, since cost basis cannot be adjusted inside a tax-advantaged account
• Why the wash sale rule applies across all accounts the taxpayer controls, including a spouse's accounts
• How to spot each of the four major exam traps the Financial Industry Regulatory Authority (FINRA) layers into wash sale questions