Wash Sales: Why They Happen and How We Minimize Their Impact

Overview

In periods of elevated volatility such as the fourth quarter of 2018—when we saw the largest quarterly decline in the U.S. market, as measured by the S&P 500, since the third quarter of 2011—investors have many opportunities to harvest losses. Preserving tax benefits by avoiding wash-sale violations becomes even more important during these periods. However, there are occasional circumstances that make wash sales unavoidable. It's important to understand why they occur and why they aren't necessarily a negative.

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