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Strategies & Market Trends : Income Taxes and Record Keeping ( tax ) -- Ignore unavailable to you. Want to Upgrade?

To: Colin Cody who wrote (2227)	6/30/1999 7:54:00 PM
From: Ira Player	Read Replies (2) \| Respond to of 5810

It would seem, to a logical person anyway, that the issue of IRA's and wash sales is an "always or never" decision. The transactions in the IRA either count in wash treatment or they don't. Therefore: IF -- a sale at a loss in a taxable account and then buying back in the IRA is a wash transaction resulting in a higher basis in the IRA and and therefore transfer the loss into the IRA, therefore causing the loss to be lost forever. THEN -- a sale at a loss in the IRA and then buying it back in the taxable account is a wash transaction resulting in a higher basis in the taxable account, and therefore transfer the loss out of the IRA and into the taxable arena, therefore causing it to be realized, with a tax savings. The wash rules are biased toward the IRS in that losses are washed, profits are not. But the tax code is explicit on this. The whole issue of IRA impacts on wash sales is due to lack of explicit rules. Maybe someone can test the THEN half of the hypothesis. The risk is reduced to the penalties associated with the loss claimed and disallowed, rather than a loss lost. Ira