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To which accounts does the wash sale rule apply?

The wash sale rule applies to all of your accounts, including your non-taxable retirement accounts, no matter where they are held. If you have multiple accounts with Wealthfront, we will monitor trades across your entire Wealthfront investment portfolio to avoid wash sale issues. If you also hold our selected ETFs in non-Wealthfront accounts, you should be mindful of the wash sale rule.

We keep our tax-loss harvesting clients up-to-date on the ETFs we may choose on their behalf. We may trade these same ETFs on a client’s behalf throughout the year (depending on market conditions). Clients who trade these ETFs elsewhere (or their index fund share classes), will need to verify that the wash sale rule has not invalidated short-term losses that we harvest for them. Note that if you are married, your spouse buying or selling an investment has the same effect as you buying or selling that investment for purposes of the wash sale rule.

Please consult with your personal tax advisor to confirm whether your non-Wealthfront accounts, if any, may be subject to wash sale restrictions. Investors and their personal tax advisors are responsible for how the transactions in both Wealthfront and non-Wealthfront accounts are reported to the IRS or any other taxing authority.

 

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