EUTRO INVESTMENT GROUP EUTO (LONGS) Message Board

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Microcap & Penny Stocks : EUTRO INVESTMENT GROUP EUTO (LONGS)

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To: Auricman who wrote (399)	12/10/1997 8:39:00 PM
From: Fred Seitel	of 1667

Ernie, the wash rule deals with the case where you have sold your original investment at a loss, and then repurchase shares (at any price) within 30 days. You can not deduct the tax loss for any shares so repurchased, but rather you increase the basis of the repurchased shares by the amount of the loss. So when you sell the repurchased shares, you recapture the loss at that point (assuming the share price has remained constant). Why such a rule? The IRS tries to have you pay taxes as early as possible (i.e., this year rather than next year). The rule discourages deliberate selling to generate tax losses just prior to the tax-filing deadline. (You have to plan ahead, i.e., at least 30 days). You can download tax publications from this IRS link: irs.ustreas.gov You probably want Publication 550. - Fred

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