Series 7 practice questionhardTax Implications 692
The wash sale rule generally disallows a loss deduction if the investor buys substantially identical securities within:
- Athe same settlement date only
- B30 days before or 30 days after the sale✓ Correct answer
- Csix months after the sale
- Dthe next calendar year only
Explanation
Why B — 30 days before or 30 days after the sale
A wash sale occurs when substantially identical securities are bought within the 61-day wash sale window centered on the loss sale date. The disallowed loss is generally added to the basis of the replacement shares.
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