U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter O— Gain or Loss on Disposition of Property › Part PART VII— WASH SALES; STRADDLES

26 U.S.C. § 1091

Loss from wash sales of stock or securities

Read at: OLRCuscode.house.gov CornellLII GovInfogovinfo.gov JustiaTitle 26 CasesGoogle Scholar
(a) Disallowance of loss deduction

In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term “stock or securities” shall, except as provided in regulations, include contracts or options to acquire or sell stock or securities.

(b) Stock acquired less than stock sold

If the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be determined under regulations prescribed by the Secretary.

(c) Stock acquired not less than stock sold

If the amount of stock or securities acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary.

(d) Unadjusted basis in case of wash sale of stock

If the property consists of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under this section or corresponding provisions of prior internal revenue laws) of the loss from the sale or other disposition of substantially identical stock or securities, then the basis shall be the basis of the stock or securities so sold or disposed of, increased or decreased, as the case may be, by the difference, if any, between the price at which the property was acquired and the price at which such substantially identical stock or securities were sold or otherwise disposed of.

(e) Certain short sales of stock or securities and securities futures contracts to sellRules similar to the rules of subsection (a) shall apply to any loss realized on the closing of a short sale of (or the sale, exchange, or termination of a securities futures contract to sell) stock or securities if, within a period beginning 30 days before the date of such closing and ending 30 days after such date—(1) substantially identical stock or securities were sold, or(2) another short sale of (or securities futures contracts to sell) substantially identical stock or securities was entered into.For purposes of this subsection, the term “securities futures contract” has the meaning provided by section 1234B(c).(f) Cash settlement

This section shall not fail to apply to a contract or option to acquire or sell stock or securities solely by reason of the fact that the contract or option settles in (or could be settled in) cash or property other than such stock or securities.

(Aug. 16, 1954, ch. 736, 68A Stat. 319; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98–369, div. A, title I, § 106(a), (b), July 18, 1984, 98 Stat. 629; Pub. L. 100–647, title V, § 5075(a), Nov. 10, 1988, 102 Stat. 3682; Pub. L. 106–554, § 1(a)(7) [title IV, § 401(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–649; Pub. L. 107–147, title IV, § 412(d)(2), Mar. 9, 2002, 116 Stat. 53.)Editorial NotesAmendments

2002—Subsec. (e). Pub. L. 107–147 substituted “securities and securities futures contracts to sell” for “securities” in heading, inserted “(or the sale, exchange, or termination of a securities futures contract to sell)” after “closing of a short sale of” in introductory provisions and “(or securities futures contracts to sell)” after “short sale of” in par. (2), and inserted concluding provisions.

2000—Subsec. (f). Pub. L. 106–554 added subsec. (f).

1988—Subsec. (a). Pub. L. 100–647 inserted sentence at end defining “stock or securities”.

1984—Subsec. (a). Pub. L. 98–369, § 106(b), substituted “no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business” for “no deduction for the loss shall be allowed under section 165(c)(2); nor shall such deduction be allowed a corporation under section 165(a) unless it is a dealer in stocks or securities, and the loss is sustained in a transaction made in the ordinary course of business”.

Subsec. (e). Pub. L. 98–369, § 106(a), added subsec. (e).

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Statutory Notes and Related SubsidiariesEffective Date of 2002 Amendment

Amendment by Pub. L. 107–147 effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by Pub. L. 106–554], to which such amendment relates, see section 412(e) of Pub. L. 107–147, set out as a note under section 151 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title V, § 5075(b), Nov. 10, 1988, 102 Stat. 3682, provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to any sale after the date of enactment of this Act [Nov. 10, 1988], in taxable years ending after such date.”

Effective Date of 1984 Amendment

Pub. L. 98–369, div. A, title I, § 106(c), July 18, 1984, 98 Stat. 629, provided that:“(1)Subsection (a).—The amendment made by subsection (a) [amending this section] shall apply to short sales of stock or securities after the date of the enactment of this Act [July 18, 1984] in taxable years ending after such date.“(2)Subsection (b).—The amendment made by subsection (b) [amending this section] shall apply to sales after December 31, 1984, in taxable years ending after such date.”

Notes of Decisions
Cited in 11 cases (3 in the last 5 years), 1932–2022 · leading case: Russell Knowles v. TD Ameritrade Holding Corp., 2 F.4th 751 (8th Cir. 2021).
Sort: Relevance Newest Treatment
Russell Knowles v. TD Ameritrade Holding Corp., 2 F.4th 751 (8th Cir. 2021). “26 U.S.C. § 1091 . Knowles alleges TD Ameritrade negligently set up the TLH Tool to toggle sales between only two groups of securities; so, if both groups of securities experienced a five-percent loss within thirty days, the TLH Tool did not have another pool of securities from…”
David E. Gantner & Sandra L. Gantner v. Comm'r of Internal Revenue, David E. Gantner & Sandra L. Gantner v. Comm'r of Internal Revenue, 905 F.2d 241 (8th Cir. 1990). · cites it 2× “See 26 U.S.C. § 1091 (1954). 3 Based on that adjustment, the Commissioner asserted a deficiency in the Gantners’ joint income tax for 1980.”
David Dewees & Anne Dewees v. Comm'r of Internal Revenue, 870 F.2d 21 (1st Cir. 1989). “26 U.S.C. § 1091 (a). However, the transactions in this case involve lots of silver for sale in different months, so they are not “wash sales,” even if they seem to cancel each other out.”
First Fed. Sav. & Loan Ass'n of Temple v. United States, 694 F. Supp. 230 (W.D. Tex. 1988). · cites it 2× “, the “Wash Sales Rule,” 26 U.S.C. § 1091 , the “Straddle Rule,” 26 U.”
Cottage Sav. Ass'n v. Comm'r of Internal Revenue, 890 F.2d 848 (6th Cir. 1990). “26 U.S.C. § 1091 . The purpose of this provision is to prevent deductions for fictitious losses and to require that there be a change in the economic position of the taxpayer.”
Liebes v. Comm'r of Internal Revenue, 63 F.2d 870 (9th Cir. 1933). “tion under the provisions of part 1 [of title 3 of the Revenue Act of 1924, 26 USCA § 1091 and note et seq.],” which deals with the estate tax.”
Union Trust Co. v. United States, 5 F. Supp. 259 (W.D.N.Y. 1933). “These sections, among other things, define the property subject to tax, fix the date when the tax is payable, provide that the Commissioner shall “determine the correct amount of the tax” (section 306 [26 USCA § 1099]), and that the Commissioner shall give notice of his…”
Morgikian v. Fid. Investments (E.D.N.Y 2022). · cites it 2× “----------------------------------------------------------------------X AZRACK, United States District Judge: Plaintiff Mihail Morgikian (“Plaintiff” or “Morgikian”), proceeding pro se, brings this action against Defendant Fidelity Brokerage Services, LLC (“Defendant” or…”
Comm'r v. Indep. Life Ins., 62 F.2d 1066 (6th Cir. 1932). “…of the Revenue Act of 1921, c. 136, 42 Stat. 227 , and Hie Revenue Act of 1924, c. 234, 43 Stat. 253 , §§ 243-245 (26 USCA §§ 1091 note, 1003-1005), and the validity of sqetiqn 245 (b) of said acts (see 26 USCA § 1004 (b). *1067 The respondent is a life insurance company.…”
Pitlor v. TD Ameritrade, Inc. (D. Neb. 2021). “See 26 U.S.C. § 1091 . It's not clear—very little is—but it seems like perhaps Pitlor believes otherwise.”
Hammond-Knowlton v. Eaton, 9 F. Supp. 633 (D. Conn. 1934). “that “the four year prescription of section 1112 of the Revenue Act of 1926, as amended by section 619 (c) of the Revenue Act of 1928, is limited to claims for the refunding or crediting of any internal revenue tax alleged to have been erroneously or illegally collected,” and…”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.