After you sell shares of a stock how soon can you buy back the same stock?

Question

Assume that there are 100 shares of stock zyx and I sell it for $5000, now how soon could I buy the same stock back either for more or less. I thought there was some law about this for tax purposes, but I couldn't find anything...thanks

Answer 1

You don't have to wait unless you are trying to take a loss and not have a wash sale kick in for tax purposes. In that case it takes 30 days.

For example, dec 28 rolls around you have a loss in stock PFQ that will just about cover a gain you made in another stock that you sold way back on jan 1. So you sell the stock. Then you think hmmm I really want to own it so you buy it back. Then you would think you have covered the gain with a loss and now have a new lower basis for the stock.

Thats fair right? No tax now right? Wrong! that is a wash sale and you will have to disregard counting the loss on your taxes. If you bought and sold for a slightly different price, or for commissions you may adjust your basis but that is it.

Answer 2

By the securities industry's rules you can buy the stock back immediately, But by the IRS's rules in order to take a tax loss or ajdust you cost basis you must wait 30 days.

Try the IRS website, and try wash sales

good luck