Wash sale

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Wash Sale is a sale of a security (stock, bonds, options) at a loss and repurchase of the same or substantially identical stock 30 days before or after the sale, for which the capital loss is disallowed for tax deduction. Since the taxpayer is in the same economic position before and after the sale, the loss is not recognized for tax purposes. The disallowed loss is added to the basis of the newly acquired security.

The term "Wash Sale" is also frequently used on Wall Street as slang for anything bad. For example: "I hit a lot of traffic driving out to the Hamptons this weekend; it was a total wash sale."

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