Selling a stock at a loss can be a useful tax strategy. The loss may offset capital gains and, in some cases, reduce taxable income, but that benefit may end up delayed if you buy the same or a substantially identical investment within 30 days before or after the sale. The wash sale rule aims to prevent investors from claiming an immediate tax loss while quickly rebuilding the same position. Because of this, timing is especially important for tax-loss harvesting.
A financial advisor can help you make a financial plan, which can include both investments and proper tax planning.
How the Wash Sale Rule Works
The wash sale rule is designed to…
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