Wash Sale Vistualizer
See whether a stock loss may trigger the wash sale rule and understand how the disallowed loss affects the cost basis of your replacement shares.
1. Original Purchase
2. Loss Sale
3. Replacement Purchase
Your Timeline
How the Wash Sale Rule Works
A wash sale may occur when you sell stock or securities at a loss and buy substantially identical stock or securities within 30 days before or after the sale. The affected loss is generally not deducted immediately. Instead, it is added to the cost basis of the replacement shares.
Sell at a Loss
You sell shares for less than their original cost.
Buy Within 30 Days
You purchase substantially identical shares within the 30-day period before or after the sale.
Loss Is Deferred
The affected loss is added to the cost basis of the replacement shares instead of being deducted immediately.
Wash Sale Example
Original Purchase
- Buy 100 shares @ $10
- Total Cost = $1,000
↓
Sell 100 shares @ $8
Loss = $200
Result
Repurchase 100 shares @ $8.50
✅ Wash Sale Triggered
Deferred Loss = $200
Adjusted Cost Basis = $1,050
Adjusted Basis Per Share = $10.50
Frequently Asked Questions
What is a wash sale?
A wash sale may occur when you sell an investment at a loss and purchase substantially identical shares within the IRS wash sale window.
What is the 30-day rule?
The wash sale window includes the 30 days before the loss sale, the day of the sale, and the 30 days after the sale.
What happens to my loss?
Instead of deducting the loss immediately, the deferred amount is generally added to the replacement shares’ cost basis.
What if I only buy back some shares?
Only the portion related to the replacement shares may become a wash sale.
Does my broker report every wash sale?
Not always. Some wash sales involving different brokers or accounts may not appear on Form 1099-B.
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