Mark, as far as call is concern, I don't know option well to comment. But I think you're describing a wash sell and people can take tas loss on it! In a wash sell, if you sell the stock at a loss and than buy back within 30 days at a high than the sell price, when you calculate your tax, you have to use your second buy price to determine you tax loss write off. For example,
I buy 100 BAY @ $22
I sold 100 BAY @ $18
I buy 100 back within 30 days @20
When I calculate my tax loss, instead of the actual loss of 22-18=4 or $400 loss, I can only take a tax loss of 22-20=2 or $200 loss.
Notice however, if I buy back at a lower price, or $16 for example, than the tax loss calculation will be just $4 per share. Therefore, your can sell at a loss for tax reason and buy back anytime, as long as you can buy back at a lower price or you're willing to take a smaller loss.
Hope it helps.
-Edwin |
