wash sale
noun[C]
FINANCE,STOCK MARKETukusasituationin which aninvestorsellsshares, etc. thenbuysthem back againalmostimmediately
(alsowash trade)
theillegalsituationwhen thebuyerandsellerofshares, etc. is the samepersonororganization. Thebuyingandsellingat the sametimegives theimpressionthat there is a lot oftradingactivityconnectedwith theshares, and mayincreasetheirprice:
In awashtrade, norealchangeofownershipof the securities isinvolved.
wash-sale rule
aruleintroducedtostopinvestorssellingandbuyingbacktheirshares, etc. within a 30-dayperiodso that they cannotclaimthesaleas ataxloss:
The wash-saleruleevenappliesif youbuynewsharesbefore yousellyourlosingones.