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Does it count as a wash sale if I sold in my roth ira and purchased in my taxable investment account
AI accountant’s answer:
Yes, a wash sale can still occur if you sell a security at a loss in one account (such as a Roth IRA) and then purchase substantially identical securities in another account (like a taxable investment account) within the 30-day window before or after the sale. The wash sale rule applies across all your accounts, regardless of their tax treatment. However, there's a key difference when a wash sale involves a tax-advantaged account like a Roth IRA. In a taxable account, you can usually defer the disallowed loss by adjusting the cost basis of the replacement securities. But because Roth IRA withdrawals are tax-free, you cannot increase the cost basis of the securities in your Roth IRA. Essentially, the loss is permanently disallowed, and you're unable to claim it on your taxes.
Comment from reviewer
Michael Eaton, CPA
Not Correct.
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