I believe this is not allowed by the IRS because ETFs tracking similar indices would be considered 'substantially identical', but I'm not sure [1]. If it is all

I believe this is not allowed by the IRS because ETFs tracking similar indices would be considered 'substantially identical', but I'm not sure [1]. If it is allowed, then you're right - this would be the most efficient way to implement tax loss harvesting. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: 1. Buy substantially identical stock or securities, 2. Acquire substantially identical stock or securities in a fully taxable trade, 3. Acquire a contract or option to buy substantially identical stock or securities, or 4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA. [1] https://www.irs.gov/publications/p550/ch04.html#en_US_2016_publink100010601 https://www.irs.gov/publications/p550/ch04.html#en_US_2016_p...