SIE practice questionmediumTrade Execution
Which of the following would be considered a wash sale?
- ASelling a stock at a loss and repurchasing a substantially identical stock within 30 days✓ Correct answer
- BSelling a stock at a gain and repurchasing it in 60 days
- CSelling a bond and buying stock in an unrelated company
- DSelling for a loss and buying mutual fund shares in a different sector
Explanation
Why A — Selling a stock at a loss and repurchasing a substantially identical stock within 30 days
IRS wash sale rules deny the loss if a substantially identical security is repurchased within 30 days. The other scenarios do not meet the 'substantially identical' or timing criteria.
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