Wash Sale Calculator

Calculate disallowed tax losses and adjusted cost basis for IRS Rule 1091

Wash Sale Impact Breakdown

Metric	Pre-Wash Sale	Post-Wash Sale	Difference

A wash sale calculator is an essential tool for active traders and long-term investors alike who need to navigate the complexities of the Internal Revenue Service (IRS) Rule 1091. This rule is designed to prevent taxpayers from claiming “artificial” losses on their tax returns by selling a security at a loss and immediately buying it back. Our wash sale calculator simplifies the math required to determine how much of your loss is disallowed and how that loss is added back to your new cost basis.

What is a Wash Sale Calculator?

A wash sale calculator specifically computes the financial impact when you sell a stock or security at a loss and repurchase a “substantially identical” security within 30 days before or after the sale. Because the IRS does not allow you to claim this loss in the current tax year, the wash sale calculator helps you track the deferred loss by adjusting the cost basis of your new position. This ensures that you eventually get the tax benefit when you sell the new position without triggering another wash sale.

Wash Sale Calculator Formula and Mathematical Explanation

The calculation involves several steps to correctly identify the deferred loss and the updated investment value. The primary logic used by the wash sale calculator is as follows:

1. Realized Loss: Original Purchase Price – Sale Price.
2. Total Disallowed Loss: Realized Loss × Number of Shares.
3. New Adjusted Basis (Per Share): Repurchase Price + Realized Loss.
4. Total New Basis: New Adjusted Basis × Number of Shares.

Variable	Meaning	Unit	Typical Range
Original Price	Initial cost of the asset	Currency ($)	$0.01 – $1,000,000
Sale Price	Price at which asset was sold at a loss	Currency ($)	Must be < Original Price
Repurchase Price	Price of the new identical asset	Currency ($)	Current Market Value
Disallowed Loss	The tax loss you cannot claim yet	Currency ($)	Calculated Value

Practical Examples (Real-World Use Cases)

Example 1: Tech Stock Volatility

An investor uses a wash sale calculator after selling 100 shares of Company A at $100 (bought at $120). They immediately buy back the shares at $105. The wash sale calculator shows a $20 per share loss ($2,000 total) that is disallowed. The new cost basis for the $105 shares becomes $125 ($105 repurchase + $20 loss).

Example 2: Partial Position Recovery

If you sell 50 shares at a loss and buy back 50 shares within 20 days, the wash sale calculator will help you realize that the capital loss is not gone; it is simply added to the price of the 50 new shares, delaying the tax deduction until those specific 50 shares are sold later.

How to Use This Wash Sale Calculator

Using our wash sale calculator is straightforward. Follow these steps for accurate results:

• Step 1: Enter the “Original Purchase Price” per share from your brokerage history.
• Step 2: Enter the “Sale Price” per share where the loss occurred.
• Step 3: Input the “Number of Shares” sold and subsequently repurchased.
• Step 4: Enter the “Repurchase Price” per share for the new position.
• Step 5: Review the “Total Disallowed Loss” and the “New Adjusted Basis” displayed by the wash sale calculator.

Key Factors That Affect Wash Sale Calculator Results

• The 61-Day Window: The rule applies to the 30 days before, the day of, and the 30 days after the sale.
• Substantially Identical Securities: The wash sale calculator logic applies not just to the same ticker, but to options or warrants on that same stock.
• IRA and 401(k) Transactions: Selling in a taxable account and buying in an IRA can trigger a permanent loss of the tax benefit.
• Quantity Mismatches: If you sell 100 shares but only buy back 50, only half the loss is disallowed.
• Cost Basis Method: FIFO vs. SpecID can change which shares are considered part of the wash sale.
• Tax Rates: While the wash sale calculator handles the basis, your final savings depend on your short-term vs. long-term capital gains rates.

Frequently Asked Questions (FAQ)

Does the wash sale calculator apply to gains?

No, the wash sale rule and our wash sale calculator only apply to losses. Gains are always taxed immediately.

What happens to the disallowed loss?

It isn’t lost forever. The wash sale calculator shows how it is added to the basis of your new shares, reducing future taxable gains.

Can I use this for crypto?

As of current IRS guidance, wash sale rules primarily apply to “stocks and securities.” However, many use a wash sale calculator for crypto to prepare for potential future legislation.

What is a “substantially identical” security?

This usually refers to common stock, or a different class of stock from the same company, or derivatives like options.

Can I trigger a wash sale by buying 20 days before selling?

Yes. The wash sale calculator assumes you are within the 61-day total window (30 before + 1 sale date + 30 after).

Does the calculator handle partial sales?

This specific wash sale calculator assumes a 1:1 replacement. For partials, calculate based on the number of shares repurchased.

Is the new basis used for holding periods?

Yes, the holding period of the original shares is usually added to the new shares’ holding period.

Why does my brokerage show different numbers?

Brokerages may use different cost-basis methods (like Average Cost for Mutual Funds), but our wash sale calculator follows standard per-share logic.

Related Tools and Internal Resources

• Capital Gains Tax Calculator – Estimate your total tax liability for the year.
• Stock Profit Calculator – Calculate net profits after commissions and fees.
• Dividend Reinvestment Calculator – See how compounding impacts your long-term basis.
• Investment Return Calculator – Track your total ROI across multiple asset classes.
• Inflation Calculator – Adjust your cost basis for purchasing power over time.
• Tax Bracket Calculator – Determine your marginal tax rate for investment income.