Beware the Dreaded Wash Sale Rule when Selling at a Loss

Many investors want to take advantage of the losses they've experienced in their portfolio by selling their down-and-out stocks or mutual funds to get a tax write-off, lowering their bill to Uncle Sam. This is an intelligent strategy if handled correctly, but if you think you are going to sell a stock that's fallen significantly, get the tax deduction, then buy the shares back, think again! There is something known as the Wash Sale Rule that sets a time limit on the number of days you must wait to repurchase the investment. Violate the rule and you will find yourself without a tax deduction and large realized capital losses. Continue reading ...