Roth IRA accounts and wash sale rules - do they apply?

There's often confusion about wash sales and retirement accounts, so let me clarify. The good news is that wash sale rules don't apply to trades that happen completely within your Roth IRA. Since Roth IRAs are already tax-advantaged accounts where gains aren't taxed and losses can't be deducted, there's no tax consequence to recognize. The catch is that wash sale rules DO apply between taxable accounts and IRAs. If you sell a security at a loss in your taxable account and then buy a substantially identical security in your Roth IRA within 30 days before or after, the loss in your taxable account will be disallowed. So while you're free to trade however you want entirely within your Roth without worrying about wash sales, you need to be careful if you're also trading the same securities in a regular taxable brokerage account.

Been using taxr.ai for sorting out my investment tax questions like this and it's been a game changer. I was trading between my brokerage account and Roth IRA and couldn't figure out if I was triggering wash sales. Uploaded my trade docs to https://taxr.ai and it flagged potential issues right away. Saved me from a potential audit headache since I didn't realize trades between different account types could be connected like that.

I was so wrong about taxr.ai! After my skeptical comment I decided to try it with my mess of trades from last year. I had no idea that some of my moves between my taxable account and Roth were creating wash sale issues. The analysis showed exactly which trades were problematic and explained why. The tool even suggested some alternative trading strategies that would have avoided the wash sale problem entirely. Definitely worth checking out if you're actively trading across different account types.

If you're having trouble getting clear answers from the IRS about wash sale rules and Roth IRAs, you're not alone. I spent WEEKS trying to get through to someone who could actually answer my specific question about this. Finally used https://claimyr.com to get through to an actual IRS agent who confirmed everything about the Roth IRA wash sale situation. Check out how it works: https://youtu.be/_kiP6q8DX5c - basically they hold your place in line so you don't have to stay on hold forever. Got connected to a real person in about 20 minutes instead of the 3+ hours I spent before.

I was completely wrong about Claimyr. After dismissing it, my tax situation got more complicated with some Roth conversion questions on top of the wash sale issues. Decided to give the service a try out of desperation. It actually works exactly as described - they called me when an actual IRS representative was on the line. The agent was able to pull up my account and answer my specific questions about wash sales between my brokerage and Roth accounts. Saved me literally hours of hold time and got me the answers I needed. Consider me converted.

Just to add my 2 cents - I verified all this wash sale stuff with my brokerage (Fidelity) last year. They confirmed that while they don't track wash sales between your different account types, the IRS rules definitely consider transactions across all your accounts. So if you sell at a loss in your taxable account and buy in your Roth within 30 days, that's still a wash sale. Their recommendation was to keep good records of all trades across all accounts if you're actively trading the same securities. Worth calling your own brokerage to confirm!

Has anyone actually had the IRS come after them for wash sales between accounts? Been trading for 15+ years and never heard of anyone getting audited specifically for this. Seems like one of those technically-against-the-rules things that nobody actually enforces.

Thanks everyone for the detailed discussion! As someone who's been trading actively in my Roth IRA, this clears up a lot of confusion. Just to make sure I understand correctly - since I'm only trading within my Roth and don't have any taxable investment accounts with the same securities, I can continue my current strategy without worrying about wash sale rules. The key takeaway seems to be that the wash sale rules are really about preventing tax loss harvesting abuse between taxable and tax-advantaged accounts. Since there's no tax benefit to lose in a Roth IRA (can't deduct losses anyway), the IRS doesn't care about the trading patterns within the account itself. This actually makes a lot of sense from a policy perspective. The 30-day rule exists to prevent people from claiming a loss for tax purposes while immediately buying back the same position. In a Roth, there's no tax game to play since gains and losses don't affect your current tax situation. Appreciate all the insights about cross-account tracking too - definitely something to keep in mind if I ever start trading in a taxable account alongside my Roth activities.

This is a great thread that really helped clarify the wash sale rules for Roth IRAs! I've been hesitant to do any active trading in my Roth because I wasn't sure about the tax implications, but now I understand that the wash sale rules don't apply to trades entirely within the Roth account. One thing I'm curious about - does this same logic apply to other types of IRAs? For example, if I'm trading in a traditional IRA, are wash sales also not a concern since gains and losses don't have immediate tax consequences there either? Or is there something different about traditional IRAs that would make wash sales relevant? Also, for those who mentioned using tools like taxr.ai - do these tools also help with tracking trades across different IRA types, or are they mainly focused on the taxable vs. tax-advantaged account interactions? Thanks for sharing all this knowledge - it's exactly the kind of practical guidance that's hard to find elsewhere!

This has been an incredibly helpful discussion! I've been trading options in my Roth IRA and was worried I might be running into wash sale issues when I close positions at a loss and then open similar positions shortly after. Reading through all the responses, it's clear that as long as I'm keeping all my trading activity within the Roth IRA itself (which I am), I don't need to worry about the 30-day wash sale rule. The reasoning makes perfect sense - since I can't deduct losses in a Roth anyway, there's no tax advantage for the IRS to prevent. One follow-up question though - does this apply to options on the same underlying stock? For example, if I sell QQQ puts at a loss and then buy QQQ calls a few days later, would that be considered "substantially identical" securities? Or does the different nature of puts vs calls mean they're not subject to wash sale rules even in taxable accounts? Thanks again to everyone who contributed - this is exactly the kind of real-world guidance that's so hard to find in the official tax publications!

This thread has been incredibly informative! I'm in a similar situation as the original poster - actively trading in my Roth IRA and was worried about wash sale implications. The key insight that wash sale rules are fundamentally about preventing tax loss harvesting makes total sense. I have one additional scenario I'd love to get thoughts on: What about ETFs that track the same index? For example, if I sell SPY at a loss in a taxable account and buy VOO in my Roth IRA within 30 days (both track the S&P 500), would that trigger a wash sale even though they're technically different securities? I know this would be an issue in taxable accounts since they're substantially identical, but I'm curious how strict the IRS is about this across account types. Also want to echo what others have said about keeping good records if you're trading across multiple account types. Even though my situation is currently just Roth IRA trading, I'm planning to start a taxable account soon and will definitely need to be more careful about coordination between the accounts. Thanks to everyone who shared their experiences and knowledge!

This whole discussion has been a real eye-opener for me! I've been sitting on the sidelines with my Roth IRA because I was terrified of accidentally triggering wash sale violations. Now I understand that the wash sale rules are really about preventing people from gaming the tax system by claiming losses while maintaining their positions - which obviously doesn't apply when you can't claim losses anyway in a Roth. The distinction everyone's made between trading within a single Roth IRA (totally fine) versus trading between taxable and tax-advantaged accounts (potential wash sale issues) is crystal clear now. I feel like I can finally start being more active with my Roth investments without constantly second-guessing myself. One thing that really stands out from reading all these responses is how much the brokerages vary in their tracking capabilities. Some track wash sales across account types, others don't, and it sounds like ultimately we're responsible for getting it right regardless. Definitely something to keep in mind as I potentially open additional accounts down the road. Thanks to everyone who shared their knowledge and experiences - this is exactly the kind of practical guidance that makes all the difference!

This has been such a valuable discussion! As someone who was also confused about wash sale rules in retirement accounts, I really appreciate how clearly everyone explained the core principle: wash sale rules exist to prevent tax loss harvesting abuse, so they don't apply to trades entirely within tax-advantaged accounts like Roth IRAs where you can't deduct losses anyway. What I found particularly helpful was learning about the cross-account implications. I had no idea that selling at a loss in a taxable account and then buying the same (or substantially identical) security in a Roth IRA within 30 days would trigger wash sale rules. That's definitely something I'll need to watch out for when I eventually open a taxable investment account alongside my Roth. The examples about ETFs tracking the same index (like SPY and VOO) being considered "substantially identical" were especially enlightening. It's clear the IRS looks at economic substance, not just ticker symbols, which makes sense but adds complexity when trading across different account types. Thanks to everyone who shared their experiences and knowledge - this thread should be required reading for anyone doing active trading in retirement accounts!

This discussion has been incredibly thorough and helpful! I want to add one more perspective from someone who learned this lesson the hard way. I was actively trading in my Roth IRA for about two years without any issues, but when I opened a taxable account and started trading some of the same stocks, I accidentally created several wash sale situations. The tricky part was that I had gotten so comfortable trading freely in my Roth (buying and selling the same positions repeatedly) that I didn't adjust my mindset when I added the taxable account. I ended up selling AAPL at a loss in my taxable account and then, out of habit, buying more AAPL in my Roth just a few days later when it dipped further. My tax software caught it during filing, and I had to disallow about $3,200 in losses. What really drove the lesson home was realizing that if I had just waited 31 days or bought the AAPL in my Roth first and then sold the losing position in my taxable account, I would have avoided the whole issue. The key takeaway for anyone reading this: trading within your Roth IRA is completely wash-sale-free, but the moment you have multiple account types with overlapping securities, you need to coordinate your trades carefully. Keep good records and consider using one of those tracking tools mentioned earlier if your situation gets complex!

This entire thread has been incredibly enlightening! As someone who's been hesitant to do more active trading in my Roth IRA due to wash sale concerns, I now have complete clarity on the situation. The key insight that wash sale rules are fundamentally about preventing tax loss harvesting abuse makes perfect sense - since you can't deduct losses in a Roth IRA anyway, there's no tax benefit for the IRS to prevent. This means I can trade freely within my Roth without worrying about the 30-day rule that applies to taxable accounts. What I found most valuable were the real-world examples of cross-account scenarios. The SPY/VOO example showing that "substantially identical" goes beyond just ticker symbols, and Aisha's story about accidentally creating wash sales when adding a taxable account, really drive home the importance of coordination once you have multiple account types. I'm particularly grateful for the practical advice about record keeping and the various tools mentioned (taxr.ai, Claimyr) for managing more complex situations. Even though my current trading is only in my Roth, I know I'll eventually want to add a taxable account, and now I understand exactly what to watch out for. Thanks to everyone who contributed their knowledge and experiences - this is the kind of practical guidance that makes all the difference for retail investors trying to navigate these complex rules!

This has been such a comprehensive and helpful discussion! As someone who's been doing some swing trading in my Roth IRA but was always second-guessing myself about potential wash sale issues, this thread has been incredibly reassuring. The fundamental principle everyone keeps coming back to - that wash sale rules exist to prevent tax loss harvesting abuse - really makes everything clear. Since Roth IRAs don't provide any current tax deductions for losses, there's simply no tax benefit for the IRS to protect against with these trades. What I found particularly valuable was learning about the complexity that emerges once you start trading across multiple account types. The examples about ETFs tracking the same underlying (SPY vs VOO), the timing considerations, and especially Aisha's real-world $3,200 lesson really highlight how careful coordination becomes essential when you have both taxable and tax-advantaged accounts. I'm curious - for those who mentioned using tracking tools or services, do any of you have experience with how they handle more exotic securities like leveraged ETFs or inverse funds? For example, would selling TQQQ at a loss in a taxable account and buying QQQ in a Roth potentially trigger wash sale rules even though they have different leverage profiles? Thanks to everyone for creating such a thorough resource - this should definitely be bookmarked for anyone doing active trading across different account types!

This thread has been absolutely fantastic - probably the most comprehensive discussion I've seen on wash sale rules and Roth IRAs! As someone who's been cautiously trading in my Roth for the past year, I finally feel like I have a complete understanding of the rules. The core concept that keeps coming up - wash sale rules exist to prevent tax abuse, so they don't apply where there's no tax benefit to abuse - is so simple yet I'd never seen it explained that clearly anywhere else. It makes perfect sense that trading entirely within a Roth IRA is wash-sale-free since you can't deduct losses anyway. What really impressed me were all the detailed cross-account scenarios and real examples. Aisha's $3,200 lesson about accidentally creating wash sales when mixing taxable and Roth trading really drives home how important coordination becomes once you have multiple account types. The SPY/VOO example showing that "substantially identical" goes way beyond ticker symbols was also eye-opening. I'm bookmarking this entire discussion for future reference, especially as I'm planning to open a taxable account next year. The practical advice about record keeping, timing considerations, and the various tools mentioned will definitely come in handy when my situation gets more complex. Thanks to everyone who shared their knowledge and experiences - this is exactly the kind of real-world guidance that's impossible to find in official publications but makes all the difference for actual investors!

This has been an incredibly thorough and educational discussion! As someone who's been hesitant to do any active trading in my Roth IRA due to confusion about wash sale rules, reading through all these responses has completely clarified the situation for me. The fundamental principle that everyone keeps emphasizing - that wash sale rules exist specifically to prevent tax loss harvesting abuse - makes perfect logical sense. Since you can't claim tax deductions for losses in a Roth IRA anyway, there's simply no tax benefit for the IRS to protect against. This means all the trading within my Roth is completely free from wash sale concerns. What I found most valuable were the detailed explanations of cross-account scenarios. Learning that wash sales CAN occur between taxable accounts and IRAs (like selling at a loss in a brokerage account then buying the same security in a Roth within 30 days) was news to me. The SPY/VOO example showing that "substantially identical" securities go beyond just ticker symbols was particularly enlightening. Aisha's real-world story about the $3,200 lesson really drives home how important it is to coordinate trades once you have multiple account types. That's exactly the kind of practical warning I needed to hear before potentially opening a taxable account in the future. Thanks to everyone for creating such a comprehensive resource - this thread should be required reading for anyone doing active investing across different account types!

This discussion has been incredibly comprehensive! I'm a newer investor who just opened a Roth IRA and was completely paralyzed by wash sale concerns after reading conflicting information online. The way everyone explained the core principle - that wash sale rules exist to prevent tax loss harvesting abuse, which simply can't happen in a Roth since you can't deduct losses anyway - finally made everything click. What really stood out to me were all the cross-account scenarios discussed. I had no idea that selling at a loss in a taxable account and buying the same security in a Roth within 30 days could trigger wash sale rules. The SPY/VOO example was particularly eye-opening - I would have assumed those were different enough securities, but clearly the IRS looks at economic substance rather than just ticker symbols. Aisha's story about the $3,200 lesson really hit home. It's so easy to see how you could get comfortable with the freedom of Roth trading and then accidentally create problems when adding other account types without adjusting your strategy. I feel much more confident now about starting to invest actively in my Roth IRA, knowing I don't need to worry about the 30-day rule as long as I'm staying within that single account. When I eventually open a taxable account, I'll definitely be much more careful about coordination between accounts. Thanks to everyone who shared their knowledge and real-world experiences - this is exactly the practical guidance that makes all the difference!