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Question
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.
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Michael Eaton, CPA
Not Correct.
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