fb-wash-0022
{
"facts": "A taxable account holds two 100-share lots of TUV common stock. On January 12, 2026 it sells the first lot at a loss. On January 20, 2026 it buys 100 shares of TUV, and that purchase disallows the January 12 loss under section 1091. On February 5, 2026 it sells the second 100-share lot at a loss. Apart from the January 20 purchase, there are no TUV acquisitions within 30 days before or after February 5.",
"question_context": "The January 20 purchase falls 16 days before the February 5 sale — inside that sale's 61-day window — but it already produced the disallowance of the January 12 loss."
}How does section 1091 treat the realized loss on the February 5 sale? Answer with exactly one option id.
loss-fully-deductible— Fully deductible — the January 20 acquisition already washed the January 12 loss and is disregarded for any other lossloss-disallowed-fully— Fully disallowed — the January 20 purchase is within 30 days of the February 5 saleloss-disallowed-partially— Half disallowed — the purchase is split between the two losses
loss-fully-deductible
Applying losses in disposition order per 1.1091-1(b), the January 20 acquisition washes the January 12 loss first. Under 1.1091-1(e), an acquisition that resulted in the nondeductibility of one loss is disregarded in determining the deductibility of any other loss. With that purchase disregarded, no acquisition remains within the February 5 sale's 61-day window, so the February 5 loss is fully deductible.
Selects loss-fully-deductible, citing the disregard rule of 1.1091-1(e).
“The acquisition of any share of stock or any security which results in the nondeductibility of a loss under the provisions of this section shall be disregarded in determining the deductibility of any other loss.”
“the provisions of this section shall be applied to the losses in the order in which the stock or securities the disposition of which resulted in the respective losses were disposed of (beginning with the earliest disposition)”
Each quoted passage is exact-matched, after typographic normalization, against the corpus text fetched from the issuing authority (hashes in the corpus manifest). An item whose quote stops matching fails the build.
“The acquisition of any share of stock or any security which results in the nondeductibility of a loss under the provisions of this section shall be disregarded in determining the deductibility of any other loss.” — cfr-1-1091-1
The key correctly applies the rules from 1.1091-1(b) and (e). The January 12 loss is processed first because it is the earliest disposition. The January 20 purchase causes the January 12 loss to be nondeductible. Under 1.1091-1(e), because the January 20 purchase resulted in the nondeductibility of the January 12 loss, it is disregarded when determining the deductibility of the February 5 loss. With no other acquisitions in the 61-day window, the February 5 loss is fully deductible.
“The acquisition of any share of stock or any security which results in the nondeductibility of a loss under the provisions of this section shall be disregarded in determining the deductibility of any other loss.” — cfr-1-1091-1
The January 20 purchase is within the 61-day window of the February 5 sale, but it already resulted in the nondeductibility of the January 12 loss. Under § 1.1091-1(e), that acquisition must be disregarded in determining the deductibility of any other loss. With no other TUV acquisitions within 30 days before or after February 5, the February 5 loss is fully deductible.
v1; no errata. Demonstrate a key error and the correction is published here, credited — challenge policy.