wash sale

noun

1. a sale of a stock at a loss and repurchase of the same or substantially identical stock within 30 days, for which the capital loss is disallowed for tax purposes.
2. the simultaneous purchase and sale of large amounts of a stock or commodity by the same speculator so as to give a false appearance of wide market activity and interest in the stock or commodity.

wash sale

noun

1. the illegal stock-exchange practice of buying and selling the same securities at an inflated price through a colluding broker to give the impression that the security has a strong market

Word History and Origins

Origin of wash sale¹

An Americanism dating back to 1840–50

Example Sentences

The clearest sign that these sorts of trades do not, in the IRS' eyes, violate the wash sale rule is that ProPublica could find no example of the agency challenging one.

From Salon

To prevent the wealthy from easily skirting the wash sale rule, Congress would need to change the law, experts said.

From Salon

The wash sale rule still foreclosed easy solutions to the problem of replacing a specific stock.

From Salon

The wash sale rule, he said, is easily skirted by "well-advised taxpayers."

From Salon

But with the wash sale rule in effect, there were real risks to what was often known as "tax-loss selling."

From Salon