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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (6389)	4/13/2000 1:31:00 AM
From: Seldom_Blue	Respond to of 8096

No need to apologize. If I made my investment decision based on some SI message board, then I deserve what I get. <G> Honestly, I always had questions about this. But I have not encountered this until now. Trading options present a different set of problems than trading commons. Options can expire, commons wouldn't. Seldom Blue

To: rkral who wrote (6389)	4/15/2000 4:40:00 PM
From: Scrumpy	Read Replies (1) \| Respond to of 8096

Wash sale rule according to TurboTax...(confirmation anyone?) "The wash sale occurs when you sell stock at a loss and, within 30 days before or after the sale, you buy substantially identical stock." "...Losses from wash sales are not deductible. Gains are taxable." "...A wash sale can also occur with contracts or options to buy or sell stock...." "... Wash sale rules also apply to short sales. They do not apply to commodity futures contracts or foreign currencies." NOW HERE'S THE KICKER TurboTax help goes on to say "The rules are designed to prevent taxpayers from selling stock to create a tax loss while STILL ACTUALLY HOLDING A PROTECTIVE POSITION IN THE STOCK (which most daytraders, I assume, are not). So even if you engage in a wash sale unintentionally or for sound economic, non-tax reasons, the rules still apply. " What this implies (if TurboTax is accurate) is that if you end up with no positions at the end of the year, you shouldn't be subject to the wash sale rule. I sure hope the last paragraph came from the IRS, and not Intuit. Any confirmation on this? ... the IRS adds this If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The result is your basis in the new stock or securities. The effect of this adjustment is to postpone the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities begins on the same day as the holding period of the stock or securities sold.