Tax & Legal

Wash Sale

Definition

Selling an asset and rebuying a substantially identical asset within a short window solely to crystallise a tax loss. The ATO can disallow the loss under Part IVA general anti-avoidance rules.

Related Terms

Capital Gains Tax

Australian tax on gains realised when selling investments. For short sellers, gains are taxed as ordinary income (not CGT) because the position is closed by buying rather than selling.

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