Internal Revenue Code · 26 U.S.C.
§ 1091. Loss from wash sales of stock or securities
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 1091
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Enacted
- October 4, 1976 by Pub. L. 94–455
- Last amended
- March 9, 2002 by Pub. L. 107–147
- Amendments
- 4 dated changes in the source credit
- Length
- 6 subsections · 658 words · about 3 min to read
- Defines
- 1 term
- Cross-references
- cites 2; cited by 9 Code sections and 17 other regulations
- Regulations
- 2 issued under this section
In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term “stock or securities” shall, except as provided in regulations, include contracts or options to acquire or sell stock or securities.
If the amount of stock or securities acquired (or covered by the contract or option to acquire) is less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the loss from the sale or other disposition of which is not deductible shall be determined under regulations prescribed by the Secretary.
If the amount of stock or securities acquired (or covered by the contract or option to acquire) is not less than the amount of stock or securities sold or otherwise disposed of, then the particular shares of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary.
If the property consists of stock or securities the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under this section or corresponding provisions of prior internal revenue laws) of the loss from the sale or other disposition of substantially identical stock or securities, then the basis shall be the basis of the stock or securities so sold or disposed of, increased or decreased, as the case may be, by the difference, if any, between the price at which the property was acquired and the price at which such substantially identical stock or securities were sold or otherwise disposed of.
This section shall not fail to apply to a contract or option to acquire or sell stock or securities solely by reason of the fact that the contract or option settles in (or could be settled in) cash or property other than such stock or securities.
(Aug. 16, 1954, ch. 736, 68A Stat. 319; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 98–369, div. A, title I, § 106(a), (b), July 18, 1984, 98 Stat. 629; Pub. L. 100–647, title V, § 5075(a), Nov. 10, 1988, 102 Stat. 3682; Pub. L. 106–554, § 1(a)(7) [title IV, § 401(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–649; Pub. L. 107–147, title IV, § 412(d)(2), Mar. 9, 2002, 116 Stat. 53.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 1091
From our articles, not part of the law
Articles that cite this section
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 2 other sections
Cited by 9 Code sections
- § 267(d)(2) Losses, expenses, and interest with respect to transactions between related taxpayers
- § 312(f)(1)(B) Effect on earnings and profits
- § 475(d)(1) Mark to market accounting method for dealers in securities
- § 860F(d) Other rules
- § 877A(a)(2)(B) Tax responsibilities of expatriation
- § 1092(b)(1) Straddles
- § 1223(3) Holding period of property
- § 1256(f)(5) Section 1256 contracts marked to market
- § 6045(g)(2)(B)(ii) Returns of brokers
Cited in 17 regulations not issued under it
- § 1.246-3 Exclusion of certain dividends.
- § 1.267(d)-1 Amount of gain where loss previously disallowed.
- § 1.267(f)-1 Controlled groups.
- § 1.312-7 Effect on earnings and profits of gain or loss realized after February 28, 1913.
- § 1.336-0 Table of contents.
- § 1.336-2 Availability, mechanics, and consequences of section 336(e) election.
- § 1.422-1 Incentive stock options; general rules.
- § 1.1012-1 Basis of property.
- § 1.1092(b)-1T Coordination of loss deferral rules and wash sale rules (temporary).
- § 1.1092(b)-5T Definitions (temporary).
- § 1.1223-1 Determination of period for which capital assets are held.
- § 1.1231-1 Gains and losses from the sale or exchange of certain property used in the trade or business.
- § 1.1233-1 Gains and losses from short sales.
- § 1.1502-13 Intercompany transactions.
- § 1.1502-32 Investment adjustments.
- § 1.6045-1 Returns of information of brokers and barter exchanges.
- § 1.6045A-1 Statements of information required in connection with transfers of securities.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter O Gain or Loss on Disposition of Property
- Part VII WASH SALES; STRADDLES
Nearby sections
- § 1091 Loss from wash sales of stock or securities
- § 1092 Straddles
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2002—Subsec. (e). Pub. L. 107–147 substituted “securities and securities futures contracts to sell” for “securities” in heading, inserted “(or the sale, exchange, or termination of a securities futures contract to sell)” after “closing of a short sale of” in introductory provisions and “(or securities futures contracts to sell)” after “short sale of” in par. (2), and inserted concluding provisions.
2000—Subsec. (f). Pub. L. 106–554 added subsec. (f).
1988—Subsec. (a). Pub. L. 100–647 inserted sentence at end defining “stock or securities”.
1984—Subsec. (a). Pub. L. 98–369, § 106(b), substituted “no deduction shall be allowed under section 165 unless the taxpayer is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of such business” for “no deduction for the loss shall be allowed under section 165(c)(2); nor shall such deduction be allowed a corporation under section 165(a) unless it is a dealer in stocks or securities, and the loss is sustained in a transaction made in the ordinary course of business”.
Subsec. (e). Pub. L. 98–369, § 106(a), added subsec. (e).
1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
Statutory Notes and Related Subsidiaries
Effective Date of 2002 Amendment
Amendment by Pub. L. 107–147 effective as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by Pub. L. 106–554], to which such amendment relates, see section 412(e) of Pub. L. 107–147, set out as a note under section 151 of this title.
Effective Date of 1988 Amendment
Pub. L. 100–647, title V, § 5075(b), Nov. 10, 1988, 102 Stat. 3682, provided that: “The amendment made by subsection (a) [amending this section] shall apply with respect to any sale after the date of enactment of this Act [Nov. 10, 1988], in taxable years ending after such date.”
Effective Date of 1984 Amendment
Pub. L. 98–369, div. A, title I, § 106(c), July 18, 1984, 98 Stat. 629, provided that:
“(1) Subsection (a).— The amendment made by subsection (a) [amending this section] shall apply to short sales of stock or securities after the date of the enactment of this Act [July 18, 1984] in taxable years ending after such date.“(2) Subsection (b).— The amendment made by subsection (b) [amending this section] shall apply to sales after December 31, 1984, in taxable years ending after such date.”