Income Taxes and Record Keeping ( tax ) Message Board

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Strategies & Market Trends : Income Taxes and Record Keeping ( tax )

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To: Colin Cody who wrote (213)	11/23/1997 4:08:00 PM
From: Colin Cody	Read Replies (1) of 5810

I was incorrect in a prior reply. Looking up IRC Section 1091(a) we see that it disallows a capital loss deduction due to a wash sale occuring within the 61 day window if it APPEARS THAT the taxpayer has ACQUIRED OR has entered into a contract or OPTION to ACQUIRE, substantially identical stock or securities - unless taxpayer is a DEARLER in that stock in the ordinary course of his business. . I didn't see specifically any mention that a WARRANT is substsntially idential to the STOCK for wash sales rules though. . Warrants and Options are similar, yet different. Holding periods when exercised differ. For stock obtained through a warrant the holding period starts with the acquisition of the warrant. Not so with an Option. . Holding periods regarding wash sales add together all time periods that the STOCK was held, but does not include any time (in the middle of a wash sale period) where a CBOE Call Option was held. . Colin

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