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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Uncle Frank who wrote (857)5/31/2001 10:56:48 AM
From: i-node  Read Replies (1) of 5205
 
You're right, but have you considered that if you've held a stock for over a year and it gets called, when you buy it back (no sooner than 31 days after the sale because of the wash rule), you have to hold it for another year before you qualify for long term capital gains treatment?

Huh? If you've got a gain in the position, why would you care about the wash sale rule (which only prohibits deductions of losses where substantially identical positions are taken within 31 days of the date of the sale generating the loss)?

People shouldn't really get all balled up about the wash sale rule. You do not lose anything when it applies -- the deduction of your loss is simply deferred until you close out the position for a period of at least 31 days.

A person can trade a stock every day from January until November 28, then close out the position in that stock. The wash sale rule will not affect his reportable income by one cent.
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