Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
This issue has been debated for years without resolution. The IRS has not provided any guidance on the issue. However, the wash sale rule may be the least of your worries. The IRS can deem this is a related party transaction and disallow the entire loss. A wash sale only defers recognition of the loss, with a related party sale, the loss is gone forever.



Thanks Ira...

So if I sell in the cash account, when could I buy in the Roth? Could I ever and feel safe? <Rhtorical question that may not have an answer.>

It seems like the related party rule would forever threaten a loss taken in the cash followed by any buy in the Roth of the same security, even months or years later. Is there any time limit on related party transactions?

Mike, always mystified by some of these regulations...
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.