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The bottom line is that there are many types of tax-related transactions that aren't reported on a 1040 or on other documents provided to the IRS. That doesn't mean that you can ignore them when determining your tax liability. By that logic, you wouldn't have to report an ordinary wash sale. The IRS doesn't know that you've repurchased shares as they never get the purchase data. They rely entirely on the honesty of the taxpayer completing Schedule D. Of course, they can always ask for the documentation if there is any reason to doubt the accuracy of the filed return. The same is now true of wash sales created between taxable accounts and IRA plans.

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