Heavy traders may assume they’ll owe no capital gains tax if their losses and gains even out. But then they stumble across the wash sale rule.
A t the height of the pandemic born meme stock boom in 2021, the 50-something investor tried his hand as a day-trader, rapidly buying and selling stocks such as AMC Entertainment. In the end, he racked up more than $7 million in gains and just a hair over that in losses, resulting in what he thought was, more or less, a wash, taxwise.
But it wasn’t a wash, because of the too-often neglected “wash sale” rule, which holds that you can’t claim tax losses on a stock that you sell at a loss, if you purchase…
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