What is the wash sale rule and how does it impact me?

A wash sale is defined as the sale of a security, such as a stock, bond, or Exchange-Traded Fund (ETF), at a loss and then the purchase of that same security or a substantially identical security within 30 days. The wash sale rule is an IRS regulation that disallows a tax deduction for a loss resulting from a wash sale. The wash sale rule is intended to prevent investors from selling securities at a loss to claim a tax benefit and replacing with similar exposure. Client withdrawals, model changes or rebalancing can lead to wash sales in an account in normal course of business.

The wash sale rule applies to securities across all of your and your spouse’s accounts.

Please consult the IRS website or a tax adviser for more information. We are a registered investment adviser and we do not provide legal advice and do not provide tax advice unless explicitly agreed to in writing between you and GS&Co.. If you don’t already have one, we strongly encourage you to contact a tax professional who can provide you with a comprehensive assessment of your tax situation.