Wash Sale?
Do Wash Sale rules apply to mutual funds? Pub 550 discusses ‘substantially identical stock or securites’. Is a mutual fund considered a ‘security’? If so, I’m guessing liquidating a muni bond fund to invest in a tax-free fund would be considered a wash sale?
Permalink Submitted by mk foss on Tue, 2008-11-25 17:44
The wash sale rules definitely apply to mutual funds. The typical example is where the fund pays dividends quarterly that are reinvested and the owner is taking monthly distributions from the fund – in that circumstance you will often get a quarterly date within 30 days of a monthly distribution causing a wash sale.