Do you know the specifics of the IRS wash sale rules?

A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:

1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade, or
3. Acquire a contract or option to buy substantially identical stock or securities.

If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The effect of this adjustment is to postpone the loss deduction until the disposition of the new stock or securities.