IRS, Tax related strategies--Traders Message Board

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Strategies & Market Trends : IRS, Tax related strategies--Traders

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To: Sword who wrote (816)	4/17/1999 8:17:00 PM
From: Gorak Shep	Read Replies (2) of 1383

NONE of them qualify as wash sales if the position closes before Dec. 31st and you don't buy it again in January. Sword, you are right in a pragmatic sense but dead wrong in the technical/legal sense. Technically you need to report ALL wash sales even if they have no material impact on the final tax due. There is nothing in the IRS regs that says you can ignore the wash sale if its effect is countered before the end of the year. In practice, it is certainly not worthwhile for the IRS to audit someone merely for a reporting issue that has no material impact. Thus some take the approach you suggest. It would be advisable to attach a note explaining what you are doing if you take this approach demonstrating why each issue has no wash consequences. But it should be clear to people that this is NOT what the IRS requires. Also, your remark should read: if the position closes before Dec. 31st and you don't buy it again in the next 30 days rather than in January since if you close the position earlier than Dec 31 you can buy it back before the end of January.

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