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Strategies & Market Trends : IRS, Tax related strategies--Traders
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To: Harold who wrote (841)4/20/1999 5:00:00 PM
From: GBT  Read Replies (1) of 1383
 
Example: Bought 1000 shares of XYX stock January 1st 1998
Sold .............. March 21st 1999 <$10,000>

Bought .............. April 22nd 1999
Sold ................ April 30rd 1999 +$7000

Should I not be able to claim the $10,000 as a loss toward all my Capital gains at the end of 1999?
Is this not the reason for the 30 days wait?
I would appreciate if you could clear this up for me. I certainly appreciate your time and effort.

Yes, you can claim the loss against capital gains. You do not have to
transfer the loss or cost basis to the second transaction because you waited longer
than 30 days. Even if you would have purchased within the 30 day
period you can still write of the loss in 99 because you have closed
out the second transaction in 99. The wash rule was instituted to
keep people from taking a loss at the end of the year and buying it
back the first of January. If you ever have a wash event, it just means that you adjust the cost basis of the second transaction to show
the loss that you had on the original transaction. If you close out
the wash sale before the end of the year and do not buy a stock, that
you took a loss on for a 30 day period as you cross into the new year, there is no tax implications associated with the wash sale, just
reporting differences. I hope this helps.
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