---
kind: "section"
citation: "26 U.S.C. § 1091"
title: "26"
title_heading: "Internal Revenue Code"
number: "1091"
heading: "Loss from wash sales of stock or securities"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/1091"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter O — Gain or Loss on Disposition of Property"
  - "Part VII — Wash Sales; Straddles"
---

# §1091. Loss from wash sales of stock or securities

- (a) **Disallowance of loss deduction—** In the case of any loss claimed to have been sustained from any sale or other [disposition](/usc/26/424.md?p=c-1) of shares of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) where it appears that, within a period beginning 30 days before the date of such sale or [disposition](/usc/26/424.md?p=c-1) and ending 30 days after such date, the [taxpayer](/usc/26/1313.md?p=b) has acquired (by [purchase](/usc/26/1361.md?p=e-1-C) or by an exchange on which the entire amount of gain or loss was recognized by law), or has entered into a [contract](/usc/26/101.md?p=f-3-A) or option so to acquire, substantially identical [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii), then no deduction shall be allowed under [section 165](/usc/26/165.md) unless the [taxpayer](/usc/26/1313.md?p=b) is a dealer in [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) and the loss is sustained in a transaction made in the ordinary course of such business. For purposes of this section, the term “[stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii)” shall, except as provided in regulations, include [contracts](/usc/26/101.md?p=f-3-A) or options to acquire or sell [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii).
- (b) **Stock acquired less than stock sold—** If the amount of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) acquired (or covered by the [contract](/usc/26/101.md?p=f-3-A) or option to acquire) is less than the amount of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) sold or otherwise disposed of, then the particular shares of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) the loss from the sale or other [disposition](/usc/26/424.md?p=c-1) of which is not deductible shall be determined under regulations prescribed by the Secretary.
- (c) **Stock acquired not less than stock sold—** If the amount of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) acquired (or covered by the [contract](/usc/26/101.md?p=f-3-A) or option to acquire) is not less than the amount of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) sold or otherwise disposed of, then the particular shares of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) the acquisition of which (or the [contract](/usc/26/101.md?p=f-3-A) or option to acquire which) resulted in the nondeductibility of the loss shall be determined under regulations prescribed by the Secretary.
- (d) **Unadjusted basis in case of wash sale of stock—** If the [property](/usc/26/317.md?p=a) consists of [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) the acquisition of which (or the [contract](/usc/26/101.md?p=f-3-A) 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](/usc/26/424.md?p=c-1) of substantially identical [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii), then the basis shall be the basis of the [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) 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](/usc/26/317.md?p=a) was acquired and the price at which such substantially identical [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) were sold or otherwise disposed of.
- (e) **Certain short sales of stock or securities and securities futures contracts to sell—** Rules similar to the rules of [subsection (a)](#a) shall apply to any loss realized on the closing of a short sale of (or the sale, exchange, or termination of a [securities](/usc/26/368.md?p=a-2-F-vii) futures [contract](/usc/26/101.md?p=f-3-A) to sell) [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) if, within a period beginning 30 days before the date of such closing and ending 30 days after such date—
  - (1) substantially identical [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) were sold, or
  - (2) another short sale of (or [securities](/usc/26/368.md?p=a-2-F-vii) futures [contracts](/usc/26/101.md?p=f-3-A) to sell) substantially identical [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) was entered into.

  For purposes of this subsection, the term “[securities](/usc/26/368.md?p=a-2-F-vii) futures [contract](/usc/26/101.md?p=f-3-A)” has the meaning provided by [section 1234B(c)](/usc/26/1234B.md?p=c).

- (f) **Cash settlement—** This section shall not fail to apply to a [contract](/usc/26/101.md?p=f-3-A) or option to acquire or sell [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii) solely by reason of the fact that the [contract](/usc/26/101.md?p=f-3-A) or option settles in (or could be settled in) [cash](/usc/26/856.md?p=c-5-K) or [property](/usc/26/317.md?p=a) other than such [stock](/usc/26/1504.md?p=a-4) or [securities](/usc/26/368.md?p=a-2-F-vii).

## Source credit

(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.)

## Notes

### 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: 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. 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.”