Short Answer
The wash sale rule (IRC §1091) disallows your loss if you buy substantially identical stock or securities within 30 days before or 30 days after the loss sale. In a taxable account the disallowed loss is not gone: it is added to the basis of the replacement shares under §1091(d) and recovered when you sell them, with the old holding period tacked on. If you buy fewer replacement shares than you sold, only that fraction of the loss is disallowed. The one place the loss really disappears is an IRA or Roth IRA repurchase, where Rev. Rul. 2008-5 disallows it with no basis restoration. None of this changed for 2025 or 2026.
2026 and 2025 Wash Sale Rule Parameters
Wash Sale Rule — IRC §1091 Parameters
| Item | Tax Year 2026 | Tax Year 2025 |
|---|
| Window before the sale | 30 calendar days | 30 calendar days |
| Window after the sale | 30 calendar days | 30 calendar days |
| Total span (with sale day) | 61 days | 61 days |
| Disallowed loss treatment (taxable) | Added to replacement basis (§1091(d)) | Added to replacement basis (§1091(d)) |
| Holding period of replacement | Tacks on the old shares (§1223(3)) | Tacks on the old shares (§1223(3)) |
| Replacement bought in an IRA | Loss permanently lost (Rev. Rul. 2008-5) | Loss permanently lost (Rev. Rul. 2008-5) |
| Applies to gains | No (losses only) | No (losses only) |
| Reporting | Form 8949 code W + Schedule D | Form 8949 code W + Schedule D |
The 30-day window each side, the basis and holding-period adjustments in §1091(d) and §1223(3), and the Rev. Rul. 2008-5 IRA treatment are the same for both years. The One Big Beautiful Bill Act (P.L. 119-21) made no change to the wash sale rule; the last substantive amendment to §1091 was in 2002. Sources: IRC §1091, IRS Publication 550, and Rev. Rul. 2008-5.
How the Wash Sale Calculation Works
The tool follows IRC §1091 and the regulations under it: find the loss, test whether replacement shares fall in the window, prorate by share count, then move the disallowed loss into the replacement basis or, for an IRA, write it off entirely. For the "substantially identical" test and the trap list, see the Wash Sale Rule Guide.
Step 1: Find the Realized Loss Confirmed
The loss is the cost basis of the shares sold minus the sale proceeds. If the proceeds are equal to or above the basis there is a gain, and the wash sale rule does not apply, because §1091 disallows losses only.
Step 2: Match Replacement Shares in the Window Confirmed
Only substantially identical shares (or options or contracts to buy them) purchased within 30 days before through 30 days after the sale are replacement shares under §1091(a). The number that matches is the smaller of the shares sold and the replacement shares bought. Whether a security is substantially identical is your call; this calculator assumes the replacement you enter qualifies.
Step 3: Prorate a Partial Wash by Share Count Confirmed
If the replacement quantity is smaller than the shares sold, only the matched fraction of the loss is disallowed (§1091(b)). Disallowed loss equals the total loss times matched shares divided by shares sold. The rest of the loss is deductible this year on Schedule D, subject to the separate $3,000 net capital loss limit.
Step 4: Move the Disallowed Loss into Basis, or Lose It Confirmed
In a taxable account the disallowed loss is added to the cost of the replacement shares under §1091(d), and the old shares' holding period tacks on under §1223(3), so the loss returns when you sell the replacement. If the replacement was bought in an IRA or Roth IRA, Rev. Rul. 2008-5 gives no basis increase, so the disallowed loss is permanently lost.
Step 5: Estimate the Tax Effect Confirmed
The tool multiplies the deductible loss by the marginal rate you choose to estimate this year's tax value, and separately shows the disallowed loss that is either deferred into basis (taxable) or forfeited (IRA). The deferred amount is recovered later; the forfeited amount is not.
Frequently Asked Questions
What is the wash sale rule?
The wash sale rule in IRC §1091 disallows a loss on the sale of stock or securities if you buy substantially identical stock or securities within a 61-day window that runs 30 days before the sale through 30 days after it. The loss is not deductible in the year of the sale. Instead it is added to the cost basis of the replacement shares and recovered when you eventually sell those replacement shares, so the rule usually defers the loss rather than destroying it.
How long is the wash sale window?
The window is 61 days: the 30 calendar days before the sale, the day of the sale, and the 30 calendar days after the sale. A purchase of substantially identical securities anywhere in that span triggers the rule, including purchases made before the loss sale. The 30 days are counted in calendar days, not trading days, so weekends and holidays count.
What happens to a disallowed wash sale loss?
For a normal wash sale in a taxable account, the disallowed loss is added to the basis of the replacement shares under §1091(d), and the holding period of the shares you sold is added to the holding period of the replacement shares under §1223(3). You recover the loss when you sell the replacement shares because the higher basis produces a smaller gain or a larger loss. The deduction is deferred, not lost, unless the replacement was bought inside an IRA.
What is a partial wash sale?
A partial wash sale happens when you buy fewer replacement shares than you sold at a loss. Only the loss on the matched shares is disallowed. If you sold 100 shares at a loss and bought 60 replacement shares within the window, 60 percent of the loss is disallowed and added to the 60 replacement shares' basis, and the remaining 40 percent of the loss is deductible this year. The calculator prorates the loss by share count.
Does the wash sale rule apply to IRAs?
Yes, and the result is far worse. Under Rev. Rul. 2008-5, if you sell a security at a loss in a taxable account and buy substantially identical securities in your IRA or Roth IRA within 30 days, the loss is disallowed and you get no basis increase in the IRA. Because basis in a traditional IRA is generally irrelevant and a Roth grows tax-free, the disallowed loss is permanently lost rather than deferred. This is the single most expensive wash sale mistake.
What counts as substantially identical securities?
Stock of the same company is substantially identical to itself, and a call option or a contract to buy that stock counts too under §1091(a). Stock in two different companies is generally not substantially identical, even competitors. Bonds and preferred shares are usually not substantially identical to common stock unless they are convertible and trade like it. Two index funds or ETFs that track the same index can be substantially identical, which is a gray area the IRS has not fully defined, so many investors swap to a fund tracking a different index to stay safe.
Can I just sell in December and rebuy in January to avoid the rule?
Only if more than 30 days separate the sale and the repurchase. The window reaches 30 days after the sale, so selling on December 20 and buying back on January 5 is still a wash sale because the two dates are 16 days apart. To deduct a year-end loss and keep the position, you must wait the full 31 days, buy a non-identical replacement during the wait, or accept that the loss is deferred into the replacement shares' basis.
Does the wash sale rule apply to gains?
No. The wash sale rule disallows losses only. If you sell at a gain, the gain is taxable now and repurchasing the security has no effect on it. The rule exists to stop investors from claiming a tax loss while keeping essentially the same investment, so it has no reason to touch a sale that produced a gain.
Did the One Big Beautiful Bill Act change the wash sale rule?
No. The One Big Beautiful Bill Act (P.L. 119-21) made no change to IRC §1091. The 30-day window, the substantially identical test, the basis and holding-period adjustments, and the Rev. Rul. 2008-5 IRA treatment are the same for tax year 2025 and tax year 2026. The last substantive amendment to §1091 was in 2002.
What to Do Next
If You Are Harvesting a Loss
Before you sell, decide whether you want to stay in the market. If you do, line up a non-identical replacement and a calendar that clears 30 days, then read the Wash Sale Rule Guide for the substantially identical line and the IRA and spouse traps.
If the Loss Survives the Wash
A deductible net capital loss is capped at $3,000 a year against ordinary income, with the rest carried forward. Run the Capital Loss Carryover Calculator to see how much you can use this year and how much rolls forward.
If You Are a Higher Earner
Net investment income above the threshold carries a 3.8 percent surtax, so a harvested loss is worth more. Confirm your exposure with the Net Investment Income Tax Calculator.