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In ordinary words.
Lose money strategically; lower the tax bill.
In legal terms.
Wash-sale and other anti-abuse rules restrict deduction timing and structure.
Where it stops being legal.
This practice is not categorically legal. Applicable federal, state and local laws, disclosures, procedural protections and the specific facts can make particular conduct unlawful.
General U.S.-focused information. Cases and statutes may have jurisdiction-specific exceptions. This citation may be a general primer; verify the governing primary authority. Not legal advice.