how soon can you buy a stock after selling it?

How soon can you buy a stock after selling it? (Wash‑sale timing and rules)

Lead summary — Short answer: how soon can you buy a stock after selling it?

For U.S. tax purposes, to avoid triggering the IRS wash‑sale rule you generally must avoid buying a “substantially identical” security during the 61‑day window that covers 30 days before the sale, the day of sale, and 30 days after the sale — practically, wait 31 days after the sale (and be mindful of purchases in the prior 30 days). This article explains the rule, the 61‑day timing, covered instruments, cost‑basis and holding‑period effects, special situations, practical avoidance strategies, reporting, and crypto considerations.

Note on news context: As of Dec 11, 2025, according to Motley Fool reporting, market activity and investor behavior were highly dynamic in 2025, with many stocks doubling and wide interest in tax planning and trading strategies at year‑end; that context increases the importance of clear wash‑sale awareness when harvesting losses. (Source date: Dec 11, 2025, Motley Fool.)

Definition — the wash‑sale rule

The wash‑sale rule is an IRS regulation intended to prevent taxpayers from creating artificial tax losses by selling a security at a loss and then quickly buying a substantially identical security. If a loss sale is followed (or preceded) by a purchase of substantially identical stock or securities within the disallowed window, the loss is disallowed for tax deduction purposes in the year of the sale.

Practically, the rule means you cannot sell a position at a loss and immediately buy the same position back if you intend to claim the loss on your tax return. The IRS treats such transactions as attempts to harvest a tax loss without a real change in economic position.

The policy purpose

The IRS designed the wash‑sale rule to stop “manufactured losses” — selling and repurchasing essentially the same investment in order to lock in a tax deduction while remaining invested in the same economic exposure.

The 61‑day window explained

The wash‑sale window is best understood as a 61‑day interval centered on the sale date: 30 days before the loss sale, the day of sale, and 30 days after the sale. If you buy substantially identical securities at any time during that 61‑day span and you sold for a loss on the central day, the loss is disallowed.

Key timing points:

• If you buy before you sell: purchases made in the 30 days before the loss sale can cause the later sale to be a wash sale. That is, buying then selling at a loss within 30 days means the earlier purchase can make the loss non‑deductible.
• If you buy after you sell: purchases made within 30 days after the loss sale also create a wash sale that disallows the loss.
• To be safe: most tax‑aware investors wait 31 calendar days after the loss sale before repurchasing the same or substantially identical security. But remember to account for purchases in the prior 30 days as well.

Why purchases before the sale matter: the IRS looks back 30 days because a taxpayer could buy shares, sell them at a loss, and claim the loss while effectively retaining similar exposure. The lookback prevents that sequencing.

How this affects the tax year: if a loss is disallowed because of a wash sale, you cannot deduct it for the tax year in which you executed the sale. Instead, the loss amount is deferred by adding it to the cost basis of the replacement shares (see below), which usually postpones the tax benefit until a later disposition.

Which instruments are covered

The wash‑sale rule applies broadly to “stocks or securities.” Common covered instruments include:

• Individual common and preferred stock of U.S. and many foreign issuers.
• Bonds and other fixed‑income securities that are substantially identical.
• Options and contracts to buy or sell the security (including calls and puts in some circumstances).
• Mutual funds and ETFs where the fund shares are substantially identical to the sold security.
• Unit investment trusts and similar pooled products.

The operative phrase is “substantially identical.” The IRS does not provide a bright‑line list of every covered pair, so interpretation matters for certain cases (for example, between two ETFs tracking the same index). Brokers, tax advisors, and courts use practical tests and facts‑and‑circumstances analysis.

What “substantially identical” generally means

In practice, “substantially identical” tends to include:

• Shares of the same issuer and class (e.g., XYZ Corp. common shares repurchased within the window).
• Securities that provide nearly identical economic exposure to the issuer (e.g., nearly identical bond issues with the same issuer and maturity).
• A replacement security that is a direct, one‑for‑one equivalent economically.

Gray areas:

• Two ETFs that both track the same broad index (for example, two S&P 500 ETFs) are often considered not substantially identical if they are issued by different fund managers and have materially different holdings, expense ratios, or creation/redemption mechanics — but the safe approach is to treat close substitutes cautiously.
• Different share classes of the same company (e.g., Class A vs. Class B) — these are sometimes substantially identical, especially if voting or economic rights are similar.
• Sector funds or different index funds that overlap heavily could be treated as substantially identical in some audits; conclusions depend on facts.

Because the IRS guidance is not exhaustive, many tax preparers recommend conservative positions: if you would answer “yes” when a reasonable investor asks whether the two securities give essentially the same market exposure, they may be substantially identical for wash‑sale purposes.

How the rule affects cost basis and holding period

When a wash sale occurs, the disallowed loss is not gone permanently. Instead, the loss is added to the cost basis of the replacement shares you acquired. This defers the tax benefit until you dispose of the replacement shares in a non‑wash transaction.

Consequences:

• Cost basis increase: the amount of the disallowed loss is capitalized into the basis of the newly acquired shares (the replacement position).
• Holding period tacking: the holding period of the original (loss) shares tacks onto the holding period of the replacement shares. That can preserve long‑term/short‑term status for the later sale.

Example effect: suppose you sell 100 shares of ABC at a $1,000 loss and immediately buy replacement ABC shares. The $1,000 loss is disallowed and added to the basis of the replacement shares. If you later sell the replacement shares, the earlier loss will typically offset gains or reduce taxable gain at that later sale.

Worked examples

(a) Sale followed by repurchase within 30 days (wash sale)

• You buy ABC on Jan 1. You sell 100 shares at a loss on Jan 15. On Jan 20 you buy 100 shares of ABC again. Because Jan 20 is within 30 days after Jan 15, the Jan 15 loss is disallowed. The disallowed loss amount is added to the basis of the Jan 20 shares; holding period from Jan 1 tacks to the Jan 20 shares.

(b) Repurchase outside the window (no wash sale)

• You sell ABC at a loss on Mar 1. You wait until Apr 2 (more than 31 days later) and repurchase ABC. No wash sale: you can claim the loss for the year of the Mar 1 sale.

(c) Partial sales / partial repurchases with basis adjustments

• You own 200 shares of XYZ bought at different times (multiple lots). On Nov 20 you sell 100 shares at a loss. On Dec 5 you buy 50 shares of XYZ. Only those replacement shares that are substantially identical and within the 61‑day window trigger wash adjustments. The disallowed portion is allocated based on matching rules and tax‑lot selection. The disallowed loss is added proportionately to the basis of the replacement shares.

Real‑world tip: preserve lot‑level records and use lot selection (specific identification) to control which lots are sold and which losses are realized.

Reporting and tax paperwork

How wash sales show up:

• Broker statements: many brokerages will report wash‑sale adjustments on year‑end statements and include adjusted cost basis where they have the cross‑account visibility and software.
• Form 1099‑B: brokerages that report basis to the IRS will often indicate adjustments and provide boxes showing adjustments for wash sales on Form 1099‑B.
• Form 8949 and Schedule D: taxpayers report sales on Form 8949 (and totals on Schedule D). If a loss is disallowed due to a wash sale, the adjusted basis and code must be entered correctly so gains/losses are calculated properly.

Important caveat: brokers may not catch everything. If you have multiple broker accounts, retirement accounts, or accounts held by a spouse, a single broker may not see purchases or sales in other accounts. The taxpayer is ultimately responsible for correct reporting.

Special situations and exceptions

Certain common scenarios have special wash‑sale implications. Below are some of the most important.

Purchases in IRAs and retirement accounts

If you sell a security at a loss in a taxable account and buy substantially identical securities in an IRA (traditional or Roth) within the 61‑day window, the loss may be permanently disallowed. The reason: you cannot add the disallowed loss to the basis of the IRA shares; IRAs have different basis rules and the IRS historically treats the loss as lost, not simply deferred.

Practical consequence: avoid repurchasing substantially identical securities in an IRA within the window if you intend to claim the loss in your taxable account.

Spousal and household transactions

Wash‑sale treatment extends to purchases made by spouses or accounts under common control. Purchases in a spouse’s account or in accounts you control (custodial, trust, corporate) can trigger wash sales. Coordinate across all accounts you own or control.

Dividend reinvestment plans (DRIPs)

Automatic dividend reinvestment that buys additional shares inside the wash‑sale window can unintentionally create a wash sale. Coordinate DRIP settings or manually control reinvestments around loss sales.

Options, contracts, and constructive purchases

Options and contracts to acquire a substantially identical security can create wash‑sale issues. For example, buying a call option that is deep‑in‑the‑money and essentially replicates a stock position may be treated as a constructive purchase. Similarly, exercised options leading to acquisitions within the window may be problematic.

Multi‑account considerations

If you trade across multiple brokerages, the wash‑sale rule still applies across accounts. A loss in one brokerage paired with a replacement purchase in another brokerage within the window can trigger a wash sale even if neither broker automatically reports the cross‑account transactions to the IRS.

Practical strategies to avoid wash sales

1. Wait 31+ days after the loss sale before repurchasing the same security. This is the simplest and safest method.

2. Buy a non‑substantially identical substitute to maintain market exposure:

   • Replace an individual stock with a broadly diversified sector ETF (not substantially identical) to retain exposure while avoiding the same‑stock repurchase.
   • Use a different ETF with a different issuer or sampling method (be mindful of the substantially identical question for very similar ETFs).

3. Use tax‑loss harvesting swaps: sell the security at a loss and buy a similar but not substantially identical security immediately (for example, swap one S&P 500 ETF for another that is structured differently). Monitor the substitute carefully.

4. Use tax‑lot selection and specific identification: sell lots with particular acquisition dates to optimize long‑term vs. short‑term treatment and to reduce the chance of creating wash sales.

5. Plan around DRIPs and corporate actions: turn off automatic reinvestment during the 61‑day window if you expect to harvest losses.

6. Coordinate across accounts: check brokerage, IRA, spouse, and trust accounts for replacement purchases.

Pros and cons of common avoidance tactics

• Waiting 31+ days: Pro — simple and safe; Con — you may miss market moves during the waiting period.
• Buying substitutes (swap to another ETF or fund): Pro — maintains exposure; Con — tracking error, small differences in performance, or the substitute might still be treated as substantially identical in ambiguous cases.
• Using options or synthetic positions: Pro — can maintain exposure without buying the same shares; Con — complexity and potential constructive purchase issues.
• Tax‑lot optimization: Pro — maximizes tax outcomes; Con — repeated administrative complexity for many lots.

Choose a strategy consistent with your tax objectives, risk tolerance, and recordkeeping capacity.

Broker, recordkeeping and automated trading considerations

Brokers differ in how they detect and report wash sales. Some brokers automatically adjust basis and report on Form 1099‑B for accounts they manage. However:

• Cross‑brokerage and cross‑account trades often go unflagged by any single broker.
• If you use automated investments, DRIPs, or algorithmic trading strategies, verify the trade timing and whether reinvestments occur inside the 61‑day window.
• Maintain complete trade records, including timestamps, lot IDs, and account IDs. Good software or spreadsheet tracking is invaluable.

If you rely on a broker to report wash sales, verify that the broker’s reporting matches your records. Mistakes in broker reporting are not an excuse for incorrect tax returns.

Application to cryptocurrency

The IRS currently treats cryptocurrencies as property rather than securities for U.S. federal tax purposes, and the statutory wash‑sale rule in Internal Revenue Code section 1091 explicitly applies to stocks and securities. Consequently, many practitioners have treated crypto as outside the traditional wash‑sale rule.

However:

• Guidance is evolving. The IRS has increased scrutiny of crypto tax reporting and could change interpretations or regulations.
• Broker reporting practices differ: some exchanges or custodial services may not report basis or wash‑sale adjustments for crypto.
• Legislative or administrative updates could eventually expand wash‑sale treatment to certain digital assets.

Given uncertainty, document your crypto trades carefully and consult a tax professional for current guidance. When considering trading on Bitget or using Bitget Wallet for digital asset custody, be aware of reporting differences and plan tax strategies accordingly.

Consequences of getting it wrong

• Disallowed losses for the tax year: a claimed loss that should be disallowed will be corrected by the IRS if identified, potentially increasing taxable income in the reporting year.
• Basis deferral: disallowed loss will be capitalized into the replacement shares, delaying tax benefit.
• Amended returns or audits: failure to report correctly could invite IRS adjustments or require amended returns.
• State tax differences: state tax treatment may vary; check local rules.

Tax issues are remediable, but corrections can be time‑consuming and may involve interest or penalties if underpayment results.

Frequently asked questions (FAQ)

Q: How soon can I buy back? A: Wait 31 days after the loss sale to be safe. Also check for purchases in the prior 30 days to avoid lookback issues.

Q: Does this apply to ETFs? A: It can. If the ETF you sell and the ETF you buy are substantially identical, the wash‑sale rule may apply. Different issuer ETFs tracking the same index can be gray — treat swaps cautiously.

Q: Can I buy back in my IRA? A: Buying substantially identical securities in an IRA within the window can permanently disallow the loss. Avoid repurchasing the same security in an IRA if you plan to claim the loss.

Q: Do brokers always catch wash sales? A: No. Brokers report what they can see. Cross‑broker or cross‑account transactions may not be detected. You are responsible for accurate tax reporting.

Q: What if I have lots acquired at different times? A: Use specific lot identification when selling to choose which lot you sold; this affects which loss is realized and whether a wash sale applies.

Best practices for investors

• Maintain complete transactional records for every account (taxable, IRA, and others).
• Use lot‑level accounting and specific identification when selling to control tax outcomes.
• Coordinate trades across custodians and family accounts to avoid accidental wash sales.
• Plan tax‑loss harvesting ahead of year‑end and avoid last‑minute trades without record reconciliation.
• Consult a qualified tax advisor for complex situations, especially involving IRAs, international holdings, or many accounts.
• If you trade digital assets, confirm whether your exchange (for example, trading via Bitget) provides basis reporting and how it treats cost basis events.

Call to action: Explore Bitget for secure trading and manage on‑chain assets with Bitget Wallet; for tax complex matters, consult a professional.

See also / further reading

• IRS Publication 550 (Investment Income and Expenses) for authoritative guidance on wash sales and investment tax rules.
• Brokerage wash‑sale help pages and year‑end tax reporting guides from your custodian.
• Professional tax guidance from a CPA or tax attorney for multi‑account or retirement account issues.

Final notes and reader next steps

Wash‑sale timing and rules are straightforward in principle but messy in practice. If you plan to harvest tax losses, document purchases and sales across all accounts, respect the 61‑day window (watch the 30‑day lookback), and consider substitution strategies to maintain exposure without triggering a wash. For investors using crypto or multiple custodians, the reporting landscape is evolving; stay current and consult a tax professional.

Further exploration: review your broker’s Form 1099‑B details, reconcile year‑end statements, and plan trades with tax‑lot selection tools to reduce surprises at tax time.

As of Dec 11, 2025, market volatility and active trading patterns reported by market coverage (Motley Fool) highlight why clear wash‑sale awareness matters for traders and investors alike. Keep records, coordinate accounts, and seek professional tax advice when in doubt.