What happens to my disallowed loss after a wash sale?
The loss isn't gone forever in most cases, it's deferred. When a wash sale is triggered, the disallowed loss gets added to the cost basis of the replacement shares you bought, and your holding period from the original shares carries over too. So when you eventually sell the replacement shares in a clean transaction, that extra basis reduces your future gain or increases your future loss, giving you the benefit later. The big exception is a wash sale caused by a repurchase inside your IRA, where the IRS treats the loss as permanently lost with no basis adjustment. Your broker tracks wash sales within one account, but not across accounts, so you must reconcile manually if you trade the same security in several places.
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