Tax Loss Harvesting: Rules & Examples


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question 1 of 3

How many days must an investor wait before buying a substantially identical investment to avoid a wash sale?

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1. If Bill uses tax loss harvesting to realize losses of $7,000, how many years will it take him to claim all of these losses on his taxes?

2. What is the maximum amount of loss that can be claimed in a single year by an investor who files taxes as Married Filing Separately?

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About This Quiz & Worksheet

Answer these questions to make sure you understand how tax-loss harvesting works. You will need to know legal limits and restrictions on claiming tax losses.

Quiz & Worksheet Goals

In this quiz and worksheet you'll review your knowledge of:

  • Tax loss and Married Filing Separately
  • Wash sale restrictions
  • Substantially identical investments

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson, such as the time limits to avoid a wash sale
  • Information recall - access the knowledge you've gained regarding the characteristics of a wash sale
  • Knowledge application - use your knowledge to answer a question about the number of years it would take to claim a tax loss of $7,000

Additional Learning

For more information about this type of investment tax policy, read the lesson titled Tax Loss Harvesting: Rules & Examples. This lesson will help you understand:

  • Benefits of tax-loss harvesting
  • Tax-loss harvesting by use of an example
  • Rules for tax-loss harvesting