What is the IRS Wash Sale Rule with ';replacement'; shares in IRA - how is loss recovered?

If you have a wash rule sale, the capital loss cannot be claimed as part of the wash sale transaction, but the loss can be added to the basis when the replacement shares are sold, so the loss is actually deferred. However, IRA transactions are not taxable events, so if the replacement shares were bought in an IRA, how is your capital loss recovered?What is the IRS Wash Sale Rule with ';replacement'; shares in IRA - how is loss recovered?
It isn't.





You have a wash sale meaning that you cannot take the loss on the shares you sold if you rebuy them inside an IRA. (Since you are the beneficiary of the IRA, it's a related party.)





Unfortunately, the basis of the stock you buy inside the IRA is never adjusted for the loss, so you would never get the tax benefit of the loss.What is the IRS Wash Sale Rule with ';replacement'; shares in IRA - how is loss recovered?
Doesn't really matter. The tax is based on what went into the IRA vs. what comes out. If you think about it, this is the equivalent to what happens in a wash sale.