Wash Sales, 401k, IRA
Hi Terry, The wash sale rules have my head spinning. If I sell a taxable asset from a brokerage account at a loss, I believe that the wash sale rules apply to activity in my IRA too. But would the wash sale rules apply to activity in my 401k too? What are some ways to document that assets bought and sold are substantially different, to avoid wash sale problems? Thanks
Terry Says
Wash sale rules DO apply if you buy the same security in an IRA after declaring a loss on a stock held outside the IRA. If the IRS starts tracking the brokerage option inside your 40l(k) assuming that you have one there, I’m quite sure the same rules would apply. Now how would the IRS get this info? I have no idea!
But my advice is to stop fooling around with “substantially similar” securities. Why ask for trouble? If you think the stock you own that is now trading at a loss will come back in the future, just hang on to it!
