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In order to offset some downside risk I have purchased SQQQ shares throughout the year. It’s almost end of 2019 and I find NASDQ is at all time high. As a result I would like to sell SQQQ share and claim loss for tax benefit.

I know there is a 30 days wash sell rule. If I sell my share at a loss and buy it back within 30 days, I will not be qualified for claiming the tax benefit.

However, I would like to keep the security SQQQ provided to my portfolio while claim the loss. As I am having extra cash available, I would like to check if I can buy the same number of new SQQQ shares before sell my old ones. Will this strategy help me get away with wash selling?

Thanks.

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A wash sale violation (WSV) occurs you purchase a “substantially identical” security or option within a 60 day window around the date that you realize a loss. That's 30 days before and 30 days after the loss.

A wash sale loss is deferred and you must increase the cost basis of the violating purchase by the amount of the loss. When you close the second position cleanly (assuming no additional violations), you get to deduct the original loss.

An alternative would be to sell your SQQQ shares to realize the loss and then buy inverse shares on another index.

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