Swapping bonds to claim losses

Description

Abstract: Taxpayers holding bonds that have decreased in value may benefit from a bond swap, which enables a taxpayer to currently benefit from the decline in a bond’s value and either increase or keep the same cash flow generated by the bond. To facilitate a bond swap, the taxpayer sells currently owned bonds at a loss and immediately reinvests the proceeds in different bonds. But this article notes that it’s important to steer clear of the wash sale rule.