We clarify how the wash sale rule applies to stock traders. The plain language tax guide for everyone who buys and sells stocks, mutual funds and stock options, from beginners to trading professionals. Options Book Learn how to get the most from your stock options or other equity compensation.
Most investors run into the wash sale rule only occasionally.
If you're an active trader, you're likely to have a large number of wash sales each year. Overview Generally, the wash sale rule applies to traders the same way it applies to investors. The difference is that traders have a much harder time keeping records relating to wash sales because they engage in so many transactions. A possible way to deal with that problem is described below. There is a way for traders to escape the wash sale rule altogether.