Wash sale rule
Also called: wash sale
The wash sale rule stops you from claiming a tax loss if you buy the same or a substantially identical investment within 30 days before or after selling it at a loss. The loss is added to the new shares' cost basis instead.
Without the rule, investors could sell at a loss for the tax break and buy straight back, keeping the same position. The loss isn't gone, only delayed until the new shares are sold.
In Journey Shares
The game applies the wash sale rule with a window of about 14 hours either way, the real 30 days scaled to a one-week tax year.
Related terms
- Capital gains tax: Capital gains tax is tax on the profit from selling an investment for more than you paid.
- Cost basis: Cost basis is what you paid for an investment, including fees, used to work out your gain or loss when you sell.
Guides
Practise with $10,000 in play money
Free. No real money involved.
For learning only. This isn't financial advice.