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Score0/20
10% · Q2/20
Question 2 of 20

In tax loss harvesting, what happens to the disallowed loss when a wash sale is triggered?

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Explanation
When a wash sale is triggered, the IRS does not eliminate the loss permanently. Instead, the disallowed loss amount is added to the cost basis of the repurchased shares. This means the embedded loss survives and will reduce the taxable gain (or increase the loss) when you eventually sell those shares in a qualifying transaction.
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