Is selling in IRA and then buying similar stock in regular account a wash sale?
Suppose I buy 10 shares of XXXX at 0 in my IRA account on Jan 2nd for total ,007.
XXXX drops to 0 on Jan 10th and I then buy 10 shares in my taxable account for a cost of ,507.
On Jan 15th the stock rises to 5 and I sell the 10 XXXX in my IRA account for ,742.
No further XXXX trades are made for the next year and no trades are made for the 2 months prior to Jan 2nd of year X.
Since the IRA is taxed at the time of withdrawal (many years from now), do I have any tax implication with regard to wash sale?
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IRA trades can trigger a wash sale in a taxable account but not the other way around.
Per Investopedia:
In 2008, the IRS issued Revenue Ruling 2008-5, in which it addressed the question of whether the wash-sale rules apply to IRAs. In this ruling, the IRS explained that when shares are sold in a non-retirement account and substantially identical shares are purchased in an IRA within 30 days, the investor cannot claim tax losses for the sale, and the basis in the individual's IRA is not increased.
Example - Claiming Tax Losses in an IRA
Suppose that you own 100 shares of YYY stock with a basis of ,000 in your brokerage account. You sell the 100 shares of YYY at a loss, for 0 on October 10.
On November 1, you buy 100 shares of YYY stock in your IRA account for 0.
According to Revenue Ruling 2008-5, you cannot deduct the 0 loss on the sale, and you cannot increase the basis of the stock purchased in your IRA by the 0 difference between the sell and repurchase.
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