A $10,000 loss is not a $10,000 refund. What you actually save depends on the gains you’ve already realized this year, whether those gains are short- or long-term, how much loss survives the mandatory netting order, and whether the wash-sale rule disallows any part of it.
The trade has to happen by the last trading day of the year. It’s the trade date, not the settlement date, that sets the tax year.
And one more thing almost no stock-investor guide mentions this year: a bill in Congress would apply the wash-sale rule to crypto retroactively, reaching back to September 14, 2026.
Tax-Loss Harvesting Savings Estimator
Enter your realized gains and losses for the year. This runs the mandatory netting order and estimates the federal tax effect — it does not choose which loss offsets which gain, because you don’t get to make that choice either.
Wash-Sale Date Checker
This checks dates only — it never asks for a ticker, account number, or broker, and it doesn’t decide whether two securities are “substantially identical.” That’s a facts-and-circumstances question for you and a tax professional.
What a Harvested Loss Is Actually Worth
A harvested loss is worth three different numbers, not one: the loss itself, the deductible net loss left after netting, and the tax actually saved.
The loss on the trade confirmation is just the starting point. Netting against your other gains for the year can shrink it. The wash-sale rule can disallow part of it. What's left is taxed away from you only at your marginal rate — so a $10,000 loss at a 24% ordinary rate and no offsetting gains saves roughly $720 this year (the $3,000 ordinary-income offset) and carries the rest forward.
| Your loss | Deductible after netting | Estimated tax saved |
|---|---|---|
| $10,000 | $10,000 nets against the $6,000 gain first, leaving $4,000 net short-term loss; $3,000 offsets ordinary income this year, $1,000 carries forward | ~$1,440 from erasing the gain, plus ~$720 from the ordinary offset — about $2,160 this year, with more value in the $1,000 carryforward |
The Netting Order
Netting is mandatory, not a choice you make. Short-term losses offset short-term gains, long-term losses offset long-term gains, and only then do the two categories cross.
Short-term gains are taxed at your ordinary rate; long-term gains get the lower preferential rate. That difference is why the type of gain a loss offsets changes how much the loss is worth — but you can't direct it. The statutory order decides.
The only real lever an investor has is timing: which tax year a loss gets realized in, given what gains already exist that year. A long-term loss sitting unused this year isn't "wasted" — it's simply worth less this year than it might be worth offsetting a future gain, or it carries forward.
| Step | What offsets what | What's left |
|---|---|---|
| 1 | Short-term losses offset short-term gains | Net short-term gain or loss |
| 2 | Long-term losses offset long-term gains | Net long-term gain or loss |
| 3 | If one category nets to a loss and the other to a gain, the loss reduces the other category's gain | A single net capital gain (carrying the character of whichever side wins) or a net capital loss |
| 4 | If the result is a net loss, up to $3,000 ($1,500 if married filing separately) offsets ordinary income | Any remaining loss carries forward, keeping its short-term or long-term character |
- Short-term losses offset short-term gains → net short-term result.
- Long-term losses offset long-term gains → net long-term result.
- A loss on one side reduces a gain on the other side → one net gain or net loss.
- A net loss can offset up to $3,000 ($1,500 MFS) of ordinary income; the rest carries forward.
The 61-Day Wash-Sale Window
The wash-sale window is 61 days: 30 days before the sale, the sale date itself, and 30 days after. The 30 days before is the half most people forget.
If you buy the same or a substantially identical security anywhere in that window — before or after the sale — the loss on the sale is disallowed, at least in part.
The window doesn't stop at December 31. A loss sold in December with a repurchase in January is still a wash sale; the calendar year has no effect on the 61-day count.
| Period | Dates | Does a purchase here trigger it? |
|---|---|---|
| 30 days before | Sale date minus 30 | Yes |
| Sale date | The day you sell at a loss | N/A — this is the sale itself |
| 30 days after | Sale date plus 30 | Yes |
| Day 31 after | First generally safe day | No, in most cases |
- 30 days before the sale date
- ↓
- Sale date
- ↓
- 30 days after the sale date
- ↓
- First generally safe repurchase day
What Counts as a Purchase
A wash sale isn't only triggered by a plain repurchase. It's also triggered by acquiring a contract or option to buy the security, by acquiring it in a fully taxable trade, and — in a case many investors don't expect — by acquiring substantially identical stock inside your IRA or Roth IRA.
Dividend reinvestment that buys shares inside the window counts. A purchase by your spouse counts. A purchase by a corporation you control counts.
What Happens to a Disallowed Loss
A disallowed loss is normally deferred, not destroyed. It gets added to the cost basis of the replacement security, and it can also affect the replacement's holding period.
The IRA case is the dangerous exception. When the replacement purchase happens inside your IRA or Roth IRA, the usual basis adjustment generally isn't available — there's no mechanism to carry the disallowed loss into an account that doesn't track basis the same way. The loss can effectively disappear.
"Substantially Identical"
The IRS has never published a checklist for what counts as "substantially identical." It's a facts-and-circumstances standard, decided case by case.
Two similar funds tracking the same index might or might not qualify, depending on details like structure, holdings overlap, and how courts and the IRS have treated comparable situations. That gray zone is exactly why this guide won't name specific tickers, funds, or "safe" swaps — a name that's safe for one investor's situation can be a wash sale for another's.
Your Broker May Not Catch It
Form 1099-B reports what the reporting rules require, and brokers generally only watch for wash sales within the same account at the same brokerage, in identical securities (not merely similar ones).
A wash sale that spans a different broker, a different account of yours, a spouse's account, or an IRA often won't appear on any 1099-B. Its absence from your tax form doesn't make the loss deductible — you're still responsible for applying the rule yourself.
The $3,000 Deduction and Carryovers
If your net capital losses exceed your net capital gains for the year, up to $3,000 of the excess ($1,500 if you're married filing separately) can offset ordinary income. Anything beyond that cap carries forward to future years, indefinitely, keeping its short-term or long-term character.
The $3,000 cap only limits how much offsets ordinary income — it doesn't cap how much loss can offset capital gains. A $50,000 loss can wipe out $50,000 of gains in a single year; it's only the leftover, against ordinary income, that's capped.
The Year-End Deadline
For publicly traded securities, the trade date — not the settlement date — determines which tax year a sale belongs to. A trade executed on the last trading day of the year counts for that year even though settlement happens later.
The last trading day of 2026 is Thursday, December 31, 2026, a full trading day on the NYSE. Unlike an IRA contribution, there's no extension into the following spring — the trade has to happen by then.
Funds and ETFs in December
Mutual funds commonly distribute capital gains in December, and those distributions are reported differently from ordinary dividends. Selling or buying a fund right around its distribution date can change your tax picture independent of any loss you're harvesting.
Check a fund's capital gain distribution date before you trade it near year-end — buying just before a distribution can hand you a taxable gain for income you never actually earned. See our guide to mutual fund capital gains distributions for the full calendar mechanics.
Crypto: Outside the Rule Today, but Watch This Bill
Under current law, §1091 covers "stock or securities." Crypto is treated as property, so the wash-sale rule doesn't apply to spot crypto today — you can sell at a loss and buy back immediately without disallowance.
That could change, and the proposed change reaches backward. H.R. 10357, the Digital Asset Tax Certainty Act, was introduced September 14, 2026, and the House Ways and Means Committee approved it 38–5 on September 16, 2026. As of this writing its status on congress.gov is "Introduced" — it has cleared committee but has not passed the full House, has not passed the Senate, and is not law.
The version approved by the committee would extend wash-sale rules to traded digital assets and apply them to dispositions after September 14, 2026 — the date the bill was introduced, not the date it might eventually be signed. A loss harvested this autumn, followed by a repurchase within 30 days, could end up disallowed if the bill is enacted as approved.
Instruments differ: qualifying U.S. dollar stablecoins would be excluded from the wash-sale extension under the committee-approved text, and how the rule would apply to crypto-related securities, funds, options, and derivatives may vary by instrument — verify by instrument before relying on any of this.
| Question | Today | If H.R. 10357 passes as approved |
|---|---|---|
| Does the wash-sale rule apply to spot crypto? | No — §1091 covers "stock or securities," not property | Yes, for traded digital assets other than qualifying stablecoins |
| From what date would it apply? | N/A | Dispositions after September 14, 2026 — before the bill could even be enacted |
| Is this law yet? | — | No; approved by committee, still needs the full House, the Senate, and the President's signature |
Checklists
Before you sell
- List every account that holds the security, including a spouse's and any IRA.
- Check the last 30 days of purchases.
- Check whether dividend reinvestment bought shares recently.
- Confirm the position is in a taxable account.
Choosing what to sell
- Know your realized gains so far this year, by type.
- Decide whether realizing the loss this year or next serves you better.
- Remember the investment decision, not just the tax one.
December specifics
- Check fund capital gain distribution dates before buying or selling a fund.
- Place the trade before the last trading day.
- Remember the window continues into January.
Records
- Keep trade confirmations.
- Track basis adjustments from any disallowed loss.
- Verify your 1099-B against your own records.
- Keep the carryover figures for next year's return.
Get help when
- You're swapping into a similar fund.
- A purchase happened in an IRA.
- You hold crypto and plan to harvest this autumn.
| Situation | Does it trigger a wash sale? | Does the basis adjustment help? |
|---|---|---|
| Same broker, same account | Yes, if within the window | Yes — usually adjusted automatically |
| Another broker | Yes — the rule applies across everything you own | Not automatically — you track and adjust basis yourself |
| Spouse's account | Yes | Not automatically reported — you track it |
| Your IRA or Roth | Yes | No — the usual basis adjustment generally isn't available |
| Dividend reinvestment | Yes, if it buys shares in the window | Often, if the same broker catches it; otherwise you track it |
| Similar (not identical) fund | Depends entirely on the facts — no bright-line test | N/A until the "substantially identical" question is resolved |
- Same broker, same account: triggers if within the window; basis adjustment usually automatic.
- Another broker: still triggers; you track and adjust basis yourself.
- Spouse's account: still triggers; not automatically reported.
- Your IRA or Roth: triggers, and the basis adjustment generally isn't available.
- Dividend reinvestment: triggers if it buys shares in the window.
- Similar fund: depends entirely on the facts.
FAQ
How much can tax-loss harvesting save me?
It depends on what gains you've realized, their type, your tax rates, and how much of the loss survives netting and the wash-sale rule. Use the calculator above for a personalized estimate.
Is it worth it if I have no capital gains?
You can still deduct up to $3,000 ($1,500 if married filing separately) against ordinary income and carry the rest forward for future years.
How are short- and long-term losses netted?
Short-term losses offset short-term gains first, long-term losses offset long-term gains first, and only then do the two categories cross against each other.
Can I choose which gain my loss offsets?
No. Netting follows a mandatory statutory order; you can't direct a specific loss to a specific gain.
What exactly is the 61-day window?
Thirty days before the sale, the sale date itself, and thirty days after — 61 days total.
Does buying before the sale trigger it?
Yes. The 30 days before the sale count just as much as the 30 days after.
Can I buy it back after 30 days?
Generally, a repurchase after the 30-day window closes falls outside the wash-sale rule, but confirm the exact dates — the checker above does the arithmetic.
Does my spouse's purchase count?
Yes, a purchase in a spouse's account counts the same as one in your own.
What if I bought it in my IRA?
It still triggers the rule, and it's the worst version of it — the usual basis adjustment generally isn't available when the replacement purchase is inside an IRA or Roth IRA.
Does a wash sale across two brokers count?
Yes. The rule applies to everything you own, not just activity within one brokerage account — even though your 1099-B may not show it.
What happens to a disallowed loss?
It's usually deferred into the cost basis of the replacement security, not destroyed — except in the IRA case, where that adjustment generally isn't available.
How much can I deduct from ordinary income?
Up to $3,000 a year, or $1,500 if you're married filing separately.
How long do carryovers last?
Indefinitely, keeping their short-term or long-term character until used.
Does a December 31 sale count for this year?
Yes, as long as the trade date is on or before the last trading day of the year — December 31, 2026 is a full trading day.
Is it the trade date or the settlement date?
The trade date controls for tax-year purposes, not the later settlement date.
Can losses offset fund capital gain distributions?
Distributions are reported differently from ordinary gains realized on a sale, and the offset mechanics depend on the type of distribution — see the funds section above and our mutual fund distributions guide.
Does the wash-sale rule apply to crypto right now?
No. Spot crypto is treated as property, not a security, so §1091 doesn't currently apply to it.
Could the crypto rule change retroactively?
Yes, potentially. A bill approved by the House Ways and Means Committee would apply wash-sale treatment to dispositions after September 14, 2026 if enacted as approved — before the bill itself could become law.
This is general information, not tax or investment advice. It's based on IRC §1091, IRS Publication 550, and the Schedule D instructions, verified on October 12, 2026. Pending legislation could change the treatment of digital assets, including retroactively, and tax situations vary — a qualified tax professional can evaluate yours.
Re-check the crypto bill's status and the NYSE trading calendar in December before relying on this page.
Daniel Hayes is the founder and sole researcher at AdvoraHQ. He covers U.S. personal finance, insurance, and consumer law — working directly from IRS publications, federal and state statutes, court opinions, and SEC filings rather than secondary summaries. His focus is the gap between what readers think they know and what the source documents actually say. Daniel is not a licensed attorney, CPA, or financial advisor; his articles are educational and not personalized advice. Reach him at Daniel.Hayes@advorahq.com.
