Stock trading: is there any tax penalty for short term buying and then selling a stock?.

[karl22]

Bought a stock, realized in a few days that it was a mistake, sold it.  Of course short term capital loss, but any other penalty?

[AamilD · Accepted solution]

There is no penalty from a tax perspective. However, as you mentioned that you sold it for a loss, you may want to be aware of the Wash Sale Rule. Wash Sale Rule comes into effect when you sell or trade a security at a loss and within 30 says before or after this sale, you buy a "substantially identical" or same stock or acquire a contract or option. If you do this, you will not be able to deduct a capital loss on this sale.