I had bought some sharers of an sector ETF in my joint account with my spouse. Now those shares (suppose quantity 250) are far below ( let say $40 per) our purchase price( let say $100).

I am thinking to buy more (150) of same ETF in UTMA account of our kid (at $40), And later sale same quantity (150) from my joint account when the ETF is $45 or so without waiting 30 days.

My question is if this will be treated as Wash Sale?


1 Answer 1


IRS pub 550 specially calls out IRA/Roth IRA accounts owned by you/spouse as being covered by wash sale rules, but not UGMA/UTMA accounts, which are really owned by the dependent. However...

Elsewhere in that same IRS pub 550:

Indirect transactions. You cannot deduct your loss on the sale of stock through your broker if, under a prearranged plan, a related party buys the same stock you had owned. This does not apply to a trade between related parties through an exchange that is purely coincidental and is not prearranged.

So, it looks like this most likely would be a wash sale.


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