Which condition is not true of a wash sale?
A)A wash sale occurs when a taxpayer sells securities at a loss and reinvests in substantially identical securities within 30 days before or after the date of sale.
B)A taxpayer who transacts a wash sale has not had a change in economic position.
C)The numbers of shares purchased and sold are not always the same.
D)When the number of shares repurchased is less than the number sold, none of the loss is deductible.

Question

Quizplus · Accepted Answer

All the other conditions are true of a wash sale. Choice A states the definition of a wash sale, choice B highlights that there is no real change in economic position for the taxpayer, and choice C mentions that the number of shares purchased and sold may not be the same. Only choice D is incorrect, as the loss can still be deductible, but only to the extent of the difference between the sale price and the repurchase price.

Which Condition Is Not True of a Wash Sale