Can I buy back a stock after selling it?

Question

I just sold a stock at a gain (I bought it at $2000 and sold it at around $2700). I think it might be poised for a short-term loss before it bounces back. Can I buy the stock again immediately without incurring any penalties or extra taxes? If not, how long do I have to wait before I can?

Answer 1

In this case you don't have to worry about wash sale rule since you had a profit. The IRS loves it when you realize a gain and then get right back into the stock! In your case they get to tax you on the $700 profit. Nothing you can do about that at this point.

If you sold for a loss then the others are right that you have to wait 30 days before buying the stock back (or not bought another lot 30 days before the sale) if you want to claim your loss on that trade.

You can buy back in most cases right away but you do need to check with your broker about being identified as a day trader, especially if you have other trades recently. Being tagged as a day trader may require you to maintain $25k equity in your account. So before your buy give them a call just to make sure.

Next time you think your stock has topped out temporarily consider selling some covered calls or buying puts instead of jumping in and out of the stock.

Answer 2

There are two things to consider.

First, what is the clearing date of your trade, particularly important if you want to use the same money. Often there is a three-day window when you sort of have the money, but can't use it on another trade.

Second, if you buy the same stock back within 30 days, you won't be able to treat the losses as deductible in the same way, because the IRS figures it as the same "event". Taxes get complicated at time.

Answer 3

As long as sold for gain can buy back immediately. If sold for loss must wait 30 days or you lose the tax deductibility of the loss. Wash rule.

Answer 4

ohhh thats hard. I don't think so but i could be wrong.

Answer 5

Vegas is right. Please pay attention to his answer.