---
title: The Dirty Wash Sale Problem
description: SS&C ALPS Advisors discusses effectively managing wash sales which are high-frequency, high-value tax problems that common solutions mishandle.
---

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# [The Dirty Wash Sale Problem](https://www.alpsadvisors.com/resources/two-minute-tuesdays/the-dirty-wash-sale-problem-20251007)

 Written by [Bobby McLaughlin](https://www.alpsadvisors.com/resources/two-minute-tuesdays/author/bobby-mclaughlin) | Oct 7, 2025 1:00:01 PM

- Advisors may need a household perspective to manage investments effectively—maximizing tax efficiency while avoiding costly traps.
- Wash sales are examples of high-frequency, high-value tax problems that common solutions mishandle.

As with most Internal Revenue Service (IRS) rules, wash sales are more complicated than advisors expect. The critical—yet often overlooked—issue: wash sales apply across a household.1

The costly trap:

- Sell a stock at a loss in a taxable account, rebuy in a spouse's account → loss disallowed, deferred to cost basis.2
- Rebuy in an Individual Retirement Account (IRA) or 401(k) → **loss permanently forfeited**.

Why most solutions fall short: Direct indexing and tax-loss harvesting tools typically optimize single accounts in isolation—blind to both investment and tax events happening in other accounts.

Our approach: We built our technology with true householding in mind—monitoring across all accounts to optimize investment risk, maximize asset location efficiency and prevent costly complications (like wash sales) before they happen.

 

```
Important Disclosures & Definitions1 Internal Revenue Service. (2024). Publication 550: Investment Income and Expenses (Including Capital Gains and Losses) For Use in Preparing 2024 Returns. Department of the Treasury.2 Ludman, A. (08/25/2025). Beware the wash sale rule. J.P. Morgan Private Bank.AAI001009
```

[View full post](https://www.alpsadvisors.com/resources/two-minute-tuesdays/the-dirty-wash-sale-problem-20251007)

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