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← Tax-Loss Harvesting
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Question
An investor sells a stock fund at a $2,000 loss and immediately uses the proceeds to buy an identical fund from the same fund family tracking the same index. What is the most likely tax result?
1
The $2,000 loss is deductible only against capital gains, not ordinary income.
2
The $2,000 loss is fully deductible because the investor maintained market exposure.
3
The $2,000 loss is disallowed under the wash-sale rule and added to the new fund's cost basis.
4
The $2,000 loss is permanently disallowed and cannot be used in future years.
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