IRS Proposes Guidance on Money Market ‘Wash Sale' Losses

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De minimis losses from a “wash sale” of certain money market fund shares may be treated as normal losses under certain circumstances under a proposed revenue procedure issued July 3 by the Internal Revenue Service.
The proposed revenue procedure described in Notice 2013-48 would allow the redemption of shares in a money market fund to escape classification as a wash sale under tax code Section 1091, so long as the amount of the loss is not more than a specified percentage of the taxpayer's basis in such shares.
De minimis losses up to 0.5 percent of a taxpayer's basis in a share would not be treated as part of a wash sale under the proposed revenue procedure, would not be disallowed, and would not affect the basis of any property, IRS said. This percentage amount would apply only for the purpose of this revenue procedure, IRS said.