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To: Doo who wrote (22095)	11/21/2001 7:33:26 PM
From: bcrafty	Respond to of 209892

Unbelievable, the wash sale has applies only to losses Here's an illustration: vip.lasallebanks.com Here's an article that might help you see how it applies when you have multiple transactions within the same security and how you may have to apply the rule several times: thestreet.com Better yet, punch in "wash sale rule" into your browser's search feature and you'll find more articles than you will ever want to read on this topic. You'll also find wash sale calculators to help you figure out the cost basis of your purchases, and the tax deferment which comes from the rule's application The significance of the rule to many people is when it comes into play near the end of the year. Lets say on December 29, 2001 you buy XYZ for $100/share, and on December 30 you sell it for $90/share, experiencing a $10/share loss. Then on December 31 you buy XYZ for $85/share and sell on Jan 3, 2001 for $110/share, giving you a $25/share gain. Because the second transaction invokes the wash sale rule you can't deduct your $10/share loss on the first transaction for the 2001 tax year. But for the 2002 tax year you can use that $10/share loss to offset your $25/share gain on the second transaction, giving you a net gain of $15/share for the 2002 tax year. The loss on the first transaction is added to the cost basis of the security in the second transaction, and that's how you get to keep the benefit of the earlier loss. The wash sale also applies to short sales, too. Like any other important matter, see a professional for specific advice, which the above is not.