Tax & Regulation
What is Wash Sale Rule - US?
The IRS Wash Sale Rule disallows a tax loss if you buy the same (or 'substantially identical') security within 30 days before or after selling at a loss, a uniquely US tax trap for active traders and tax-loss harvesters.
Formula
Disallowed loss is added to the cost basis of the replacement shares (deferred, not lost forever).
How to Interpret
The 61-day window (30 days before + sale day + 30 days after) catches many investors who sell a stock at a loss, then accidentally rebuy via dividend reinvestment, a different account (including IRAs of you or your spouse), or a substantially identical ETF. Common workaround: swap to a similar but not identical ETF (e.g. sell VOO, buy IVV, debated whether 'substantially identical') for 31+ days.
Typical Ranges
N/A - IRS rule under IRC Section 1091. India has no direct equivalent (Indian capital gains rules don't disallow wash sales).