Wash Sales in an IRA

Since gains and losses realized in an IRA are non taxable, there are no requirements to file any reports with the IRS, nor is there any requirement to calculate wash sales from trading in an IRA account.

However, if you take a loss in a stock in a taxable trading account and then buy that same stock in your IRA within the 30 day window, it may or may not trigger a wash sale according to the IRS wash sale rules. For an interesting discussion on this subject please see the article: Wash Sales: IRAs and Other Related Persons from Fairmark Press.

This begs the question: Since no IRS reporting is required for trades made in an IRA and therefore no wash sales are calculated, how do you report wash sales across taxable and non-taxable accounts?   The thought might occur to you to merge any IRA accounts in your tax lot accounting software along with all of your other trading accounts so the software can calculate wash sales between all accounts.

However, losses in the IRA account should not trigger additional wash sales and any gains or losses realized in the IRA account should not be reported to the IRS on schedule d or d-1 attachment.  The sad fact is there is no software that we know of that does this, so most traders do not include their IRA accounts for wash sale calculations.

Understand how and when wash sales affect you.