Siman 665

An etrog on the seventh day is forbidden the entire day, for it was set aside for all seven. Its prohibition begins from the first day even before one recited the blessing over it, since he set it aside for the mitzvah on the eve of the Yom Tov (Taz). And even if it became disqualified after he performed the mitzvah with it, it is nevertheless forbidden all seven days, for it was set aside for all seven. But on the eighth day, it is permitted. And even though during the twilight between the seventh and the eighth days it is still muktzah due to the doubt of the preceding day, nevertheless, we do not say in such a case: since it was set aside for the twilight, it is set aside for the entire day. And it is not similar to a sukkah, as will be explained in siman 667, which is forbidden even on the eighth day, for there it was set aside during twilight by means of an action, as he was obligated to eat there. This is not the case regarding an etrog, for it is only because of the preceding day (Tosafot Sukkah 12, beginning with "Ad").

And in the Diaspora, where they observe two days—the etrog is forbidden even on the eighth day, due to the doubt of the day. And it is permitted on the ninth, even if the ninth falls on the first day of the week. And we do not say that the Shabbat prepares it for permission, which would be preparation from Shabbat to Yom Tov, for this is not considered preparation regarding an object that already existed in the world and upon which no action was performed (Magen Avraham, subsection 2). Nevertheless, some forbid it when it falls on the first day of the week due to the reason of preparation. And know that an etrog that became disqualified—even in the Diaspora it is permitted on the eighth day (Taz), for it is impossible to forbid it to such an extent when it is disqualified.

If one designated seven etrogim for the seven days – one fulfills the obligation with each one, and eats it the next day. And even though during twilight it was forbidden, nevertheless, since he only designated it for one day – it is as if he explicitly stipulated that he only sets it aside for its mitzvah (Magen Avraham). And know that the Yerushalmi holds that if it became disqualified it is released from its status of muktzeh, but this is not the approach of our Talmud (see Taz).