The specific tax rules that pertain to money market funds (MMFs) in a wash sale are detailed here.

If a shareholder of a floating-NAV MMF (see Chapter 2.04 for details on this type of money market fund) were to report each redemption of their funds as a sale, then that shareholder would typically experience frequent wash sales. Revenue Procedure 2014-45 provides relief for such a shareholder. If the redemption results in a loss, the IRS will not treat the redemption as part of a wash sale. (Rev. Proc. 2014-45).

The final regulations issued in July 2016 did not extend the exemption in Rev Proc 2014-45 to stable-NAV MMFs because the regulations allow shareholders of stable NAV MMFs to use the NAV accounting method, under which net gain or loss is determined for each computation period rather than each redemption. Thus, without a loss on a specific redemption, the wash sale rule does not apply.