Understanding Wash Sales in Stocks: A Guide for Investors
Given the complexity of stock trading, investors must be aware of the various rules and regulations that govern the market. One such rule is the sale of laundry. In this blog post, well explore what a wash sale is in stocks, how its defined, and what its implications are for investors.
What is a laundry sale? A wash sale is a transaction in which an investor sells a security at a loss and repurchases the same or a substantially similar security over a period of time. The Internal Revenue Service (IRS) enforces wash sale rules to prevent artificial tax losses for investors.