How long after you buy a stock do you have to wait to sell in order to recognize a capital loss for tax purposes?

Answer 1

You can sell it immediately. There is no waiting time.

However, if you purchased substantially identical shares during the 30 days before or after the sale, the wash sale rule applies and you have to postpone taking the loss until you sell the other shares. Remember that the rule applies to automatic stock purchase plans and dividend reinvestment plans, too.

The shares that you sold are not replacements for themselves. For example, if you bought shares on Monday and sold them for a loss on Tuesday, this does not count as a wash sale unless you also bought some OTHER shares within the 30 day period. However, I suspect your concerned not just in the Capital oss, but if it is long or short term. Long term gains and losses are given a special lower tax rate (15%) whereas short term ones are taxed at oridinary income rates (which may be as high as 35%). An investment owned for one year or less....hence it is better to realize losses in under a year so they are given the higher rate on the loss (benefit) and Gains after one year to get the lower tax rate. Things can get more complicated when you have both long and short gains and losses in the same year...and certainly the "wash sale" rules mentioned above come in to play (if you try to sell and realize the loss say before one year, and replace the property quickly thinking it is undervalued and anticipating it will increase in value over the next few years).