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 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!