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Wash Sale Rule: Non-Traded REIT, BDC and Interval Fund Tenders

By Jorge··28 min read

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Quick Answer

A tender or repurchase sold at a loss can be a wash sale: the loss is not deductible if you acquire substantially identical shares from 30 days before to 30 days after the sale, a 61-day span (26 U.S.C. 1091(a); 26 CFR 1.1091-1(a)). As of October 15, 2026, for a sale on Thursday, December 31, 2026 that span runs from Tuesday, December 1, 2026 to Saturday, January 30, 2027 (our arithmetic). Three funds' own documents add three traps the broker pages leave out. Blue Owl Credit Income Corp.'s offer says “The sale date for tax purposes will be the date we accept Shares for purchase,” yet its last December offer expired December 31, 2025 and the price was set on January 26, 2026. Cliffwater Corporate Lending Fund's prospectus names a reinvested dividend as a replacement purchase and enrolls registered holders in reinvestment automatically. And a tender counts as a sale only if it passes a test in section 302(b) of the Internal Revenue Code; if not, the cash is a dividend and there is no loss. Revenue Ruling 2008-5 is about an IRA buying the replacement shares, not about a reinvestment plan.

Key Takeaways

  • The statute and the regulation say the same thing: a loss from a sale or other disposition of shares of stock or securities is not allowed if, within 30 days before or after the sale, you acquired (by purchase, or by a fully taxable exchange) or contracted to acquire substantially identical stock or securities (26 U.S.C. 1091(a); 26 CFR 1.1091-1(a) and (f)). Neither text mentions a market, so non-traded shares are inside the rule.
  • A tender is a sale only if it passes section 302(b) of the Internal Revenue Code. Blue Owl Credit Income's offer lists three tests (complete termination, substantially disproportionate, not essentially equivalent to a dividend) and says that if none is met the cash is taxed as a dividend. The statute's route for a publicly offered regulated investment company, section 302(b)(5), needs a redemption on the stockholder's demand; the tender and interval fund documents we read do not describe that (our reading).
  • The date you are treated as selling can fall after the offer closes. Blue Owl Credit Income's Q4 2025 offer expired December 31, 2025, but the company determined the price ($9.34 for Class I) on January 26, 2026, and its offer says the tax sale date is the date it accepts shares. A sale on January 26, 2026 would have a span from December 27, 2025 to February 25, 2026, not December 1 to January 30 (our arithmetic).
  • Reinvestment counts. Cliffwater Corporate Lending Fund's prospectus says a loss may be disallowed if shares are replaced “pursuant to a dividend reinvestment in Shares of the Fund,” and IRS Publication 550 treats shares bought by reinvesting distributions as bought shares with their own holding period. Blue Owl Credit Income's plan is opt-in; BREIT's and Cliffwater's enroll most holders unless they elect cash.
  • Revenue Ruling 2008-5 (Internal Revenue Bulletin 2008-3) holds that if you sell at a loss and cause your IRA or Roth IRA to buy substantially identical stock within the span, the loss is disallowed and the IRA's basis is not increased. It does not mention distribution reinvestment plans, and Publication 550's wash sale section does not either.
  • In our worked example (1,000 Class I shares of Blue Owl Credit Income bought at $9.57 and sold at $9.34) the loss is $230.00; 100 replacement shares inside the span disallow $23.00 and leave $207.00 deductible (our arithmetic).

CSV · 99 rows

Wash sale rule for non-traded REIT, BDC and interval fund tenders: statute, regulation, IRS text, three funds' filings and 2026 window dates

99 rows: the Code, regulation and IRS Publication 550 text behind the rule, Revenue Ruling 2008-5, Form 8949 code W, Blue Owl Credit Income's Q4 2025, Q2 2026 and Q3 2026 offers, BREIT's repurchase and reinvestment terms, Cliffwater's offers and wash sale text, and our span arithmetic.

What the rule says, in the Code's own words

The rule is short. The statute, 26 U.S.C. 1091(a), applies to “any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities” where, “within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date,” the taxpayer acquired “substantially identical stock or securities,” by purchase, by an exchange in which the entire amount of gain or loss was recognized, or by entering a contract or option to acquire them. The regulation, 26 CFR 1.1091-1(a), names that span the “61-day period,” and section 1.1091-1(f) says “acquired” covers a contract or option entered into in the span. The last amendment to section 1091 in the Code text we saved is dated March 9, 2002; we found no 2025 or 2026 change to it.

Four mechanical points matter for a fund holder, each from the text:

  • Matching. If you bought fewer shares than you sold, the regulation matches the new shares, “beginning with the earliest acquisition,” against an equal number of the shares sold; the loss on those shares is the part not allowed (26 CFR 1.1091-1(c)).
  • Where the loss goes. The disallowed loss is not gone. Section 1091(d) of the Internal Revenue Code sets the basis of the new shares at the basis of the shares sold, adjusted by the difference between the prices (26 U.S.C. 1091(d); 26 CFR 1.1091-2). IRS Publication 550 adds that the holding period of the old shares carries over.
  • Different accounts. The average-basis regulation says a taxpayer applies section 1091 “regardless of whether the stock or security sold or otherwise disposed of and the stock acquired are in the same account or in different accounts” (26 CFR 1.1012-1(e)(7)(iv)).
  • The IRA case. Publication 550 lists four ways to trigger the rule; the fourth is to “Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.” The disallowed loss is added to the cost of the new shares “except in (4) above,” so in the IRA case it is not recovered through basis.

The IRS does not let the broker form decide. Publication 550: “However, you cannot deduct a loss from a wash sale even if it is not reported on Form 1099-B.” A broker's Form 1099-B box 1g shows a disallowed loss only where the replacement had the same CUSIP number and was bought in the same account; a replacement bought in a different account, in an IRA or under a different CUSIP (a different share class) does not meet that test (our reading of the Publication 550 conditions).

Is a tender a sale at all? Section 302

A fund that buys back its own shares is redeeming stock. Publication 550 says a redemption of stock “is treated as a sale or trade and is subject to the capital gain or loss provisions unless the redemption is a dividend or other distribution on stock.” The statute says when it is an exchange: section 302(b) of the Internal Revenue Code gives the “not essentially equivalent to a dividend” test in (b)(1), the “substantially disproportionate” test in (b)(2), complete termination in (b)(3) and partial liquidation in (b)(4). If none applies, section 302(d) treats the redemption as a distribution of property to which section 301 applies, which is a dividend to the extent of earnings and profits.

The funds we read describe it in nearly the same words. Blue Owl Credit Income Corp.'s offer to purchase (Schedule TO-I, accession 0001628280-26-059106) says “If none of the tests set forth in Section 302(b) of the Code are met, amounts received by a shareholder who sells Shares pursuant to the Offer will be taxable to the shareholder as a ‘dividend’” and that in that case “the tax basis in the Shares tendered to the Company will be transferred to any remaining Shares held by such shareholder.” That matches the regulation: “proper adjustment of the basis of the remaining stock will be made” (26 CFR 1.302-2(c)). BREIT's prospectus says a repurchase that does not qualify “will constitute a dividend equivalent repurchase.” A loss that arrives as a dividend is not a capital loss to harvest, so the wash sale rule never gets a chance to apply (our reading).

Three details are specific to a holder of these funds:

  • Spouse and family count. For the tests, shares attributed under section 318 are counted (26 U.S.C. 302(c)(1)); under section 318(a)(1) an individual is treated as owning the stock of his or her spouse, children, grandchildren and parents. Section 302(c)(2) can switch off family attribution for a complete termination, but only if the holder meets conditions that include filing an agreement to notify the IRS of any new interest within 10 years. The offer documents say attributed shares “generally must be taken into account.”
  • The mutual fund route. Section 302(b)(5) treats a redemption as an exchange for a “publicly offered regulated investment company” only if it is “upon the demand of the stockholder” and the company “issues only stock which is redeemable upon the demand of the stockholder.” A tender offer or an interval fund repurchase is made at the fund's offer on its schedule, not on demand (our reading), so the fund documents rely on the three tests above.
  • The third test and small holders. Blue Owl Credit Income's offer says the IRS “has indicated in published rulings that a relatively minor reduction of the proportionate equity interest of a Shareholder whose relative equity interest is minimal and who does not exercise any control” should be treated as not essentially equivalent to a dividend. It does not say any particular holder passes.

When is the sale date? Three funds, three clocks

The span is anchored on the date of the sale. For shares bought on an exchange, Publication 550 says to “not confuse the trade date with the settlement date”: its example sells on December 31 and settles in January and counts the sale in the year of the trade. That example is about securities “traded on an established securities market.” None of the funds' documents we saved applies that rule to a tender or repurchase, so the date comes from each fund's own terms.

Fund and vehicleLast dated step in the filingPrice setWhat the filing says about the tax date
Blue Owl Credit Income Corp. (BDC, quarterly tender offer), Q4 2025 offerExpired Wed Dec 31, 2025 at 7:00 p.m. EasternDetermined Mon Jan 26, 2026: Class I $9.34 (final amendment, accession 0001628280-26-003929)“The sale date for tax purposes will be the date we accept Shares for purchase.” The final amendment gives no acceptance date.
Blue Owl Credit Income Corp., Q2 2026 offerExpired Tue Jun 30, 2026Determined Wed Jul 22, 2026: Class I $9.08 (accession 0001628280-26-049601)Same sentence in the offer; payment was made in promissory notes.
Blue Owl Credit Income Corp., Q3 2026 offer (open at our check)Expires Wed Sep 30, 2026 at 7:00 p.m. Eastern, unless extendedNet offering price as of Sep 30, 2026; not yet reported at Oct 15, 2026Same sentence (accession 0001628280-26-059106); the wash sale text counts from the date the shares are purchased by the company in the offer.
Blackstone Real Estate Income Trust (non-traded REIT, monthly repurchase plan)Repurchases are made as of the opening of the last calendar day of the month; settled generally within three business daysTransaction price in effect on the Repurchase Date, generally the prior month's NAV per shareWe found no wash sale text in the 10-K or the prospectus; the prospectus tax section describes the three Section 302 tests.
Cliffwater Corporate Lending Fund (interval fund, quarterly repurchase offer), Q4 2025 offerOffer period Nov 6 to Tue Dec 9, 2025; request deadline 4:00 p.m. Eastern on Dec 9Pricing date Dec 9, 2025 (NAV at the NYSE close); payment within seven calendar daysProspectus: a loss may be disallowed if shares are replaced within the 61 days beginning 30 days before and ending 30 days after the disposal.

Two things follow. First, the Q4 2025 offer of Blue Owl Credit Income is a case where the closing date and the pricing date are in different years. The offer states a sale date of “the date we accept Shares for purchase,” and the filings we read show a price determined on January 26, 2026 but no acceptance date. A holder who tendered in that offer expecting a 2025 loss may have a 2026 sale (our reading), which changes the tax year, the holding period and the 61-day span. Our year-end calendar lists last December's expiry dates; the table above shows why an expiry date alone is not the sale date. Second, an interval fund's tender cannot be taken back once the deadline passes. Cliffwater's prospectus says that after the Repurchase Request Deadline the tender “may not be rescinded,” so a holder cannot cancel it to avoid a purchase made after the deadline; the pricing date was the same day as the deadline in the two offers we read.

Distribution reinvestment: the purchase you did not make

A reinvestment plan buys shares for you on a date you did not choose, and the tax text treats reinvested shares as bought shares. Publication 550 says the cost basis of fund shares acquired by reinvesting distributions “is the amount of the distributions used to purchase each full or fractional share,” and that “the holding period of each new share begins the day after that share was purchased.” The three funds differ on whether you are in the plan unless you act:

FundReinvestment plan terms in the filingWhat the filing says about wash sales
Blue Owl Credit Income Corp.An “opt-in” plan: only shareholders who enrolled have cash distributions reinvested in additional shares of the same class (10-K for 2025, accession 0001812554-26-000011)Offer: loss “ordinarily will be disallowed to the extent a shareholder acquires substantially identical Shares within 30 days before or after the date the Shares are purchased by the Company”; the offer does not mention reinvestment
Blackstone Real Estate Income TrustStockholders (other than listed states and some broker-dealer clients) have distributions “automatically reinvested” unless they elect cash; shares are bought “on the business day such distribution would have been paid,” at the transaction price when the distribution is payable (prospectus 424B3, accession 0001628280-25-037857)The prospectus we saved does not use the words wash sale; the 10-K says a reinvestor is taxed on the amount reinvested
Cliffwater Corporate Lending FundEach registered shareholder is automatically in the plan, with dividends and capital gain distributions reinvested in shares priced at the then-current NAV unless the holder elects cash (prospectus 486BPOS, accession 0001213900-26-082700)Names reinvestment twice: the loss may be disallowed “such as pursuant to a dividend reinvestment in Shares of the Fund,” and “including investments made pursuant to reinvestment of dividends and/or capital gain distributions”

For Blue Owl Credit Income the distribution calendar is public. The board declared a gross Class I distribution of $0.070100 per share for each monthly record date, with record dates of September 30 and October 30, 2026, payable on or before October 30 and November 30, 2026 (Form 8-K, accession 0001812554-26-000053). For a sale on December 31, 2026 the span starts December 1, so a reinvestment on November 30, 2026 would fall one day before it (our arithmetic); distributions for later record dates had not been declared in the filings we read. A holder not enrolled in the plan has no automatic purchase at all. For BREIT, whose repurchase is made as of the opening of the last day of the month and whose monthly record date is the close of that day, the reinvestment dates come from a payment calendar that is not in the documents we saved (not verified).

What Revenue Ruling 2008-5 says. The ruling (Internal Revenue Bulletin 2008-3, January 22, 2008) has one fact pattern: A sells 100 shares of X Company stock for $600 against a $1,000 basis on December 20, 2007, and on December 21 “causes” an IRA or Roth IRA to buy 100 shares. The holding: “The loss on the Sale of stock is disallowed under § 1091. A's basis in the individual retirement account or Roth IRA is not increased by virtue of § 1091(d).” It says it does not address any issue under section 4975. The ruling does not address a reinvestment plan, and no IRS text we saved says in terms that a plan purchase is a purchase under section 1091; the support for that reading is Publication 550's treatment of reinvested shares as bought shares and Cliffwater's prospectus. Whether a reinvestment inside an IRA that you did not “cause” on a given day is a purchase by you is a question for your preparer (not verified).

Partial tender, share class switch, sibling fund

SituationWhat the sources sayWhat they do not say
Partial tender with prorationThe offer documents say shares are taken pro rata when more are tendered than the fund buys. Blue Owl Credit Income accepted 26.6% of tendered shares in its Q2 2026 offer after holders tendered 18.8% of shares outstanding. The loss is figured on the shares actually accepted; regulation 1.1091-1(c) matches replacement shares to the shares sold in order of acquisition.Whether a partial acceptance affects the section 302 tests for a given holder; the offers say the result depends on each holder's facts.
Share class switchPublication 550: whether securities are substantially identical depends on “all the facts and circumstances.” BREIT's prospectus says a Class T, S or D share converts at month end into Class I shares of equivalent NAV when a fee limit is reached.No IRS text we saved says whether buying a different class of the same fund, or a conversion, is a replacement purchase (not verified).
Buying a sibling fundPublication 550: “Ordinarily, stocks or securities of one corporation are not considered substantially identical to stocks or securities of another corporation,” but they may be substantially identical in some cases, for example in a reorganization.How the IRS treats two funds with the same manager and a similar portfolio; Publication 550 gives no fund example.
Contract or option to buySection 1091(a) and regulation 1.1091-1(f) count a contract or option to acquire entered into in the span.Whether a standing subscription order, an automatic investment plan or a signed subscription agreement for a later monthly closing is one (not verified).

Worked example with real NAVs and dates

This is our arithmetic on a hypothetical holder, using Blue Owl Credit Income's reported Class I prices. It is not a position taken for anyone. The Class I net offering price was $9.57 for January 2025 (10-K, accession 0001812554-26-000011), so we assume 1,000 Class I shares bought on January 2, 2025 at that price for $9,570.00. The Q4 2025 offer purchased Class I shares at $9.34 (the price per share in effect as of December 31, 2025, determined January 26, 2026), so the proceeds are $9,340.00 and the loss is $230.00, or $0.23 a share, assuming the tender passes section 302(b).

Case (our arithmetic)Replacement sharesLoss disallowedLoss still deductibleBasis of the replacement
A. No purchase in the span0$0.00$230.00Not applicable
B. Buys 100 Class I shares on Jan 2, 2026 at $9.34 (we assume the January price equals the December 31 NAV)100$23.00 (100 x $0.23)$207.00$934.00 + $23.00 = $957.00 (section 1091(d))
C. One reinvestment of $70.10 (1,000 x $0.0701) at $9.34 (our assumption: the plan buys at about that price)7.505$1.73 (7.505 x $0.23)$228.27Cost plus $1.73
D. Buys 100 shares on Feb 2, 2026100$0.00 if the sale date is Dec 31, 2025; $23.00 if it is Jan 26, 2026$230.00 or $207.00Depends on the sale date

Case D is the point of the example. A sale on December 31, 2025 has a span of December 1, 2025 to January 30, 2026, so a February 2, 2026 purchase is outside it. A sale on January 26, 2026, the day the company determined the price, has a span of December 27, 2025 to February 25, 2026, which includes February 2 (our arithmetic). The offer says the tax sale date is the acceptance date and the filings give no acceptance date, so the holder cannot tell from the filings which case applies and would ask the fund or look at the Form 1099-B.

Two more effects, also our arithmetic. A share bought on January 2, 2025 has a holding period that begins January 3, 2025 (Publication 550: “the holding period of each new share begins the day after that share was purchased”). Through December 31, 2025 that is 363 days; through January 26, 2026 it is 389 days. The offer says gain or loss is long-term “if the holding period for such Shares is more than one year,” so the same shares could carry a short-term loss in one case and a long-term loss in the other. And if the Q2 2026 acceptance rate of 26.6% applied to a request of 1,000 shares, 266 shares would be sold and 734 would stay, still holding an unrealized loss.

A dated 2026 calendar for a Q4 loss

The span is 61 days: the sale date, 30 days before and 30 days after. The table gives the span for sale dates that match funds' recent patterns. It is arithmetic from 26 U.S.C. 1091(a); the funds' Q4 2026 dates had not been published in the filings we read on October 15, 2026, so each sale date is a scenario, not a promise by any fund.

If the sale date isSpan startsSpan endsLast purchase date before the spanFirst purchase date after the spanWhy this date
Mon Nov 30, 2026Sat Oct 31, 2026Wed Dec 30, 2026Fri Oct 30, 2026Thu Dec 31, 2026Last calendar day of the month; BREIT repurchases as of the opening of the last calendar day
Wed Dec 9, 2026Mon Nov 9, 2026Fri Jan 8, 2027Sun Nov 8, 2026Sat Jan 9, 2027Cliffwater's Q4 2025 request and pricing date was Dec 9, 2025; the 2026 date is not yet published
Thu Dec 31, 2026Tue Dec 1, 2026Sat Jan 30, 2027Mon Nov 30, 2026Sun Jan 31, 2027 (first business day Mon Feb 1, 2027)Last day of 2026; Blue Owl Credit Income's Q4 2025 offer expired Dec 31; BREIT's December repurchase is as of the opening of Dec 31
Tue Jan 26, 2027Sun Dec 27, 2026Thu Feb 25, 2027Sat Dec 26, 2026Fri Feb 26, 2027Last year Blue Owl Credit Income set its price on Jan 26; a sale on this date would be a 2027 sale

Three readings of the table. The last day to sell for a 2026 loss is Thursday, December 31, 2026, but for a tender it is the date the fund treats as the sale, which may be a January date. The last purchase date that does not touch a December 31 sale is Monday, November 30, 2026; buying, or reinvesting, from December 1 on is in the span. The first purchase date after a December 31 sale's span is Sunday, January 31, 2027, so in practice Monday, February 1, 2027 (our arithmetic). A holder who wants the exposure back in the meantime is buying a different security, for example another fund, which Publication 550 says is ordinarily not substantially identical to a different corporation's shares. The other fixed year-end dates are on our year-end tax calendar.

Reporting and limits

A wash sale is reported on Form 8949 with code “W” in column (f) and the disallowed amount as a positive number in column (g) (Publication 550; Instructions for Form 8949, 2025). If a Form 1099-B shows a different amount in box 1g, the instructions say to enter the correct amount and, where it is less, to attach a statement explaining the difference. Allowed capital losses offset capital gains and then up to $3,000 ($1,500 if married filing separately) of other income a year, with the rest carried to later years (Publication 550, 2025). A loss on fund shares held six months or less is treated as long-term to the extent of capital gain distributions received, which Publication 550, the Blue Owl Credit Income offer and Cliffwater's prospectus all state. Our companion pages cover how loss rules differ for crowdfunding investments, return of capital, how tender offers work and the RMD problem when the fund is in an IRA.

What a holder can do with this

  • Find the sale date first. Ask the fund or your broker which date your Form 1099-B will show for the tender: the expiry, the pricing date, the acceptance date or the payment date. Everything else counts from it.
  • List every purchase in the span, in every account. Include reinvested distributions, monthly subscriptions, a spouse's account, and an IRA that holds the same fund, because Publication 550 and Revenue Ruling 2008-5 treat an IRA purchase as a wash sale with no basis recovery.
  • Look at your reinvestment election. Blue Owl Credit Income's plan is opt-in; BREIT's and Cliffwater's enroll most holders. Turning reinvestment off changes future distributions only; it does not undo a purchase already made in the span.
  • Check the section 302 side. If you hold through a spouse, trust or entity, or tender only part of a large position, ask whether the tender is a sale or a dividend before counting on a loss.
  • Do not count on an extension or a timing slip. An offer can be extended, a price can be set after year-end, and a prorated tender sells only part of what you asked.

Questions to ask your CPA (take the funds' documents with you):

  1. Which date will my Form 1099-B show as the sale date for this tender, and does the span count from it?
  2. Is this tender a sale or a dividend for me under section 302(b), given my spouse's and trust's shares and the part I am tendering?
  3. Do I have a purchase, a reinvestment or a monthly subscription in the 61-day span in any account, including an IRA?
  4. If a reinvestment is in the span, how do I split the disallowed loss and the basis of the new shares, and will the fund's 1099-B show it?
  5. Does swapping into another class of the same fund, or into another fund from the same sponsor, count as substantially identical for my facts?
  6. If I tender all my shares, do shares acquired through reinvestment inside the span and sold in the same tender still count as replacements? (We found no source for this; not verified.)
  7. Which tax year does a tender that closes in December and is priced in January belong to?

This is analysis of public documents, not investment, legal or tax advice.

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FAQ

Sources, read and saved on October 15, 2026: 26 U.S.C. 302, 318, 67 and 1091 (Legal Information Institute text of the United States Code); 26 CFR 1.302-1, 1.302-2, 1.318-1, 1.1012-1, 1.1091-1 and 1.1091-2 (eCFR, text as of September 30, 2026); IRS Publication 550 (2025); Instructions for Form 8949 (2025); Revenue Ruling 2008-5, Internal Revenue Bulletin 2008-3 (January 22, 2008); Blue Owl Credit Income Corp. (CIK 1812554) Form 10-K for 2025 (0001812554-26-000011), Schedule TO-I filed August 26, 2026 (0001628280-26-059106) and November 26, 2025 (0001628280-25-054161), Schedule TO-I/A final amendments (0001628280-26-003929 and 0001628280-26-049601) and Forms 8-K filed June 22, July 24, August 24 and September 23, 2026; Blackstone Real Estate Income Trust Form 10-K for 2025 (0001662972-26-000032) and prospectus 424B3 (0001628280-25-037857); Cliffwater Corporate Lending Fund prospectus 486BPOS (0001213900-26-082700) and Forms N-23c-3 (0001213900-25-107013 and 0001213900-26-082097). Span dates, day counts and the worked example are our arithmetic. Fund dates for the fourth quarter of 2026 were not published at our check. This is analysis of public documents, not investment, legal or tax advice.

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