I sold some fund shares with high turnover on my personal investment account with the intent of buying something similar later on my IRA account. However, after I sold (and within 30 days), I received dividends on the leftover shares which I have set to automatically invest into shares. Have I created a wash sale? I've seen questions asking with something similar, but I'm not sure if order matters between dividend and selling.

Presuming I have caused a wash sale: if I sold 100 shares, then got a 2 share "dividend" via reinvestment of my other shares, can I still use the 98 shares as a loss or is the entire transaction considered a wash sale?

  • Was all of this in the same tax year? If so then it doesn't matter.
    – D Stanley
    Apr 17 '19 at 13:20
  • I think my question was pretty specific that I was asking which shares are considered a wash share. Yes, a dividend reinvestment causes a wash sale per the referenced question, but it did not specify which portion was considered a wash (only the dividend amount, not the entire original sale). Also, the referenced question is a buy-dividend-sell situation within the allotted time. My situation was more a sell-dividend; although now I understand the dividend is essentially a buy on my behalf.
    – BLaZuRE
    Dec 1 '19 at 22:02

If you realize loss and you purchase new shares in the same security within 30 days (before or after), a wash sale occurs. This also applies to reinvested dividends. The portion of the loss allocable to the reinvestment will be disallowed and must be carried forward.

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