RSU Wash-Sale Case Study: Cross-Account Replacement Shares

Employer-stock wash sales are easy to miss because replacement shares can arrive through an automatic RSU vest or a purchase in another account. The result is usually share-matched: buying fewer shares than were sold at a loss can create a partial, not total, disallowance.

This hypothetical example shows the arithmetic.

Priya's Loss Sale

Priya owns vested employer stock in a taxable brokerage account. On March 14, she sells 300 shares at a loss of $42 per share.

Shares sold: 300.
Total realized loss: 300 × $42 = $12,600.

She intends to use the loss in the current year, but two acquisitions occur during the next 30 days.

Two Replacement Acquisitions

| Date | Account | Acquisition | Shares | |---|---|---|---:| | March 24 | Taxable stock-plan account | RSU shares vest | 50 | | April 3 | Traditional IRA | Same employer stock purchased | 100 |

Both dates fall within 30 days after the March 14 loss sale. Assuming the shares are matched under the wash-sale rules and no other relevant transactions exist, 150 of the 300 sold shares have replacement shares.

The Partial Disallowance

At $42 of loss per share:

50 taxable-account replacement shares match $2,100 of loss.
100 IRA replacement shares match $4,200 of loss.
The remaining 150 sold shares retain $6,300 of loss, subject to the complete return.

The whole $12,600 loss does not disappear. Half is affected because half the sold quantity was replaced.

Taxable Replacement vs. IRA Replacement

For the 50 replacement shares acquired in the taxable stock-plan account, the $2,100 disallowed loss is generally added to their basis, deferring the deduction until a later disposition.

IRS Revenue Ruling 2008-5 addresses a more severe IRA result: when an individual sells stock at a loss and an IRA buys substantially identical stock during the window, the loss is disallowed and the IRA's basis is not increased by that amount. The $4,200 matched to the IRA purchase is therefore not preserved as basis in the IRA.

Why the RSU Calendar Matters

An RSU vest is an acquisition of employer shares even though the employee did not click a buy button. Other scheduled activity can include:

ESPP purchases.
Dividend reinvestment.
Recurring brokerage orders.
Option exercises.
A spouse's purchase of the same stock.

Review the 30 days before the sale too. A recent vest can create a wash sale even if all future purchases are paused.

A Better Pre-Trade Process

Export the employer-stock acquisition calendar.
Search every account for purchases in the prior 30 days.
Identify scheduled acquisitions in the next 30 days.
Compare the value of harvesting now with waiting or selling fewer shares.
Avoid buying the employer stock in an IRA during the window.
Save the lot matching and basis-adjustment records.

Changing an ESPP or equity-award election can have compensation and plan consequences, so do not alter benefits solely for a tax trade without reviewing the terms.

For the broader stock-compensation workflow, read tax-loss harvesting with stock-based compensation. For household coverage, see wash-sale monitoring across brokerages.

Bottom Line

In this example, $6,300 of a $12,600 employer-stock loss is affected by replacement shares: $2,100 is deferred into taxable-account basis and $4,200 is disallowed because of the IRA purchase. Accurate dates, share quantities, and account types are essential.