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

To: Nittany Lion who wrote (231)	12/1/1997 9:37:00 PM
From: Cisco	Read Replies (3) \| Respond to of 5810

Gary, Thanks for the reply. When I read post #129, I still was not sure. The post suggest you can buy the stock back in a SEP or KEOGH because of it being a "separate entity". However I have read that being a separate entity does not in and of itself protect you from the wash rule if the entities are related. For example if a spouse, your controlled company or another related taxpayer buys replacement securities within the prohibited time peroid then the wash rule applies. If the wash rule does not apply to repurchase of stock within a SEP or KEOGH account after selling it from an taxable account, it seem to me it must rest on the fact that the difference in the tax treatment of the two stocks makes them not "substantially identical" for purposes of the wash rule. I hope that they are correct in that the wash rule does not apply, but I do not believe the reason they stated would be the reason why. If I could sell about $20,000 of a stock that I am currently down about 30% in order to help off set my taxable gains and then buy it back in a tax deferred account, the tax savings could be significant. Since I expect this stock to completely recover within the next 90 days, I do not want to lock myself out of it for the 30 day period. In addition I also added to my holdings of this stock within the last 30 days so my window for missing the wash rule is restricted to the last two weeks of December which would make me have to wait until Mid January to replace it unless I can bypass the wash rule by using a tax deferred account. I sent an e-mail to my CPA, and I still waiting for a response. Cisco