Image Source: PexelsA wash sale is a situation in tax law where you sell a security at a loss and then repurchase the same or a substantially identical security within a specific timeframe, typically 30 days before or after the initial sale. This repurchase triggers the wash-sale rule, preventing you from claiming the capital loss on your tax return for that year. Here’s why wash sales are important to investors.Reducing Tax Liability:
Understanding the Rules:
Overall, wash sales are an important aspect of tax law that investors need to be aware of to optimize their tax strategy and make informed investment decisions.
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