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English definition of “wash sale”

wash sale

noun [C]
 
 
FINANCE, STOCK MARKET
a situation in which an investor sells shares, etc. then buys them back again almost immediately
( also wash trade) the illegal situation when the buyer and seller of shares, etc. is the same person or organization. The buying and selling at the same time gives the impression that there is a lot of trading activity connected with the shares, and may increase their price: In a wash trade, no real change of ownership of the securities is involved.
wash-sale rule a rule introduced to stop investors selling and buying back their shares, etc. within a 30-day period so that they cannot claim the sale as a tax loss: The wash-sale rule even applies if you buy new shares before you sell your losing ones.
(Definition of wash sale from the Cambridge Business English Dictionary © Cambridge University Press)
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