Now in this time of year end tax planning you should be looking at the possibility of selling some financial losers in order to trim your tax bill. Remember capital losses can be used to offset your gains. You are also allowed to deduct up to $3,000 of other income. Any excess of losses over the $3,000 are carried over to next year.
Wash-sale rule: If you buy the identical securities within 30 days before or after the sale, the loss is not deductible. The disallowed loss would be added back to the basis of the new shares. The rule can bite you if your IRA quickly buys stock that you sold at a loss in a taxable account.
In a bond “swap” to avoid the wash-sale rule, you can replace the security from the same issuer; if the maturity date or interest rate are different.