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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 147.19-3.6%Feb 3 3:59 PM EST
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To: LindyBill who wrote (37811)8/8/1999 12:20:00 AM
From: RoseCampion  Read Replies (2) of 152472
 
Semi-OT: need some tax explanations from you more seasoned pros.

After the shenanigans in the market last week <g>, I've got a little margin call situation at Fido to take care of. No big deal, not to worry, more an inconvenience in timing than anything. My question is this: let's say to do make Fido happy I elect to sell off the last lot of Q that I bought, which for argument's sake we'll say was 1000 shares bought @ $150 and sold at the current price of $148 - hence a $2/share paper loss.

Having met the call and then closed out some other positions and/or deposited new funds a week or so later (the basis of the timing problem presumably resolved), I then buy back the same 1000 shares - let's say the current price is $154. (Hey, that's what happens when you're away from the good lady Q for any length of time. :)

My question is this: I know these transactions come under the IRS wash sales rules, and that I can't take the original $2 loss as a 'real' loss on my taxes - it's as if the first sale never happened, right? But what is my new basis in the 1000 shares I own again - still $150? $154? $150-148+154=$152? And when does the long-term capital gains period now start - the day I bought the original shares or the day I bought them back?

For extra credit: what if instead of repurchasing the shares at $154, Q has dropped in the meantime and I re-buy the shares at $140 instead? Does that change any of the answers above?

Advice and knowledge much appreciated; thanks.

taxingly,
-Rose-
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