SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Income Taxes and Record Keeping ( tax )
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jonas1 who wrote (2262)7/14/1999 5:52:00 PM
From: Kaye Thomas  Read Replies (2) of 5810
 
Gosh, I'm depressed that my site didn't make everything crystal clear (lol).

The wash sale rule never applies to a sale at a gain. If you sell at a gain and buy back within 30 days you have the same result as if you sell at a gain and buy back after 31 days. It simply doesn't matter that you bought the same stock again, even if you bought it back five minutes later. And it wouldn't matter if you have a series of purchases as in your FIFO example.

Here's what happens in your last example. You sold at a $20 loss but you bought again within 30 days, so it was a wash sale. You can't claim the loss, but you add the disallowed loss to your basis. You paid $80 for the stock, but you're treated as if you paid $100, because that's your basis. If you sell it for $80 and don't repurchase, you'll report a $20 loss.

The holding period for the replacement stock includes the holding period of the stock you sold. Usually that's bad, because the replacement stock has a built-in loss, and the longer holding period can turn that into a long-term loss, which is bad. But if the stock recovers, this will work to your benefit because it may permit you to report a long-term capital gain.

Kaye Thomas, author
Fairmark Press Tax Guide for Investors
fairmark.com
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News