2 Answers: Can I Sell Index Fund with Amazon Stock and then Buy Amazon Stock Individually w/ No Tax Penalty?
There is no such thing as a tax penalty for buying and selling the same stock in the same year.
What you can’t do is sell a stock to take a tax loss and then turn around and buy that same stock back within 30 days. That is known as a ‘wash sale’ and you lose the ability to take a tax loss. That is not a tax penalty.
An index fund that owns some Amazon stock is not Amazon stock. The wash rule would not apply here.