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Non-Tech : Parlux (PARL) Fragrances
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To: Don Powrie who wrote (369)3/24/1997 7:36:00 PM
From: Stingray   of 527
 
> This is perhaps a little off the topic but what did you mean by "the IRS wash sale rules"? Is there a penalty for holding a stock for less than 30 days?

Basically it kicks in when you hold shares in a company bought at price X, the stock goes down and you sell your shares at a lower price Y to establish a tax loss but then buy them right back at price Z. If the events Y and Z occur within 30 days of one another the IRS treats this as a "wash sale" and you would end up with a capital gain of Y-Z
and your basis in the stock would remain X. The wash rule also applies if you reverse the order of the last two transactions, i.e. buy high, buy low, sell low. If the two transactions at the low price are within 30 days of one another you are assumed to have sold the lower priced stock. Any tax guide will have a good explanation of how this works.
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