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Don’t let tax losses go down the drain

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in Small Business Tax

Under the “wash sale” rule, you can’t deduct a loss from the sale of a security if you acquire a substantially identical security within 30 days of the sale.

So, wait at least 31 days before you buy back the same security you sold at a loss. If you want to lock in your current position for a particular stock but still protect your loss, double up by buying the stock now and wait at least 31 days to sell the original shares.

Tip: If a stock loss is disallowed due to the wash-sale rule, you can at least add the amount of your loss to your basis in the stock.

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