Wash Sale Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Wash Sale, written in plain English, along with examples of how it is used.

What is Wash Sale?

“A security’s purchase and sale either within a short period of time (typically thirty days) or simultaneously. If a wash sale occurs, the taxpayer cannot deduct any capital losses on the sale. Instead, the loss is added to the basis of similar securities that were recently purchased.