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Capital losses.....

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    Capital losses.....

    I am looking to some of my mutual funds this week and will take a loss on them. I remember reading in a magazine that you couldn't write off a loss if you reinvested in another mutual fund in the same class within 30 days of the sell.
    Is this true?
    Any more specifics would be greatly appreciated!

    The Wash Sale rule says that if you sell a security at a loss and purchase a "substantially identical" security within 30 days, you can't claim the loss on your taxes.

    The gray zone is what constitutes "substantially identical." If I sell Pepsi stock and buy Coke stock, does that count? Probably not. If I sell my Vanguard S&P 500 Index and buy Fidelity S&P 500 Index, that probably would count.

    Most funds are different enough that I don't think it is an issue as long as you don't buy back the exact same fund.

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