Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: The Perfect Hedge who wrote (4449)	12/4/1997 11:17:00 AM
From: bw	Respond to of 95453

This is a summary of the "wash sale" rule that could be of interest to those that have sold for losses and bought-back at lower prices. I was unaware of this rule for the first part of the year, and found that it could complicate the style that I was using. Hope it is helpful..[thanks LT for bringing it to my attention] Wash Sale Rule: You cannot deduct losses from sales or trades of stock or securities in a wash sale. However, any gain from these sales is taxable as a capital gain. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: 1.Buy substantially identical stock or securities, 2.Acquire such stock or securities in a fully taxable trade, or 3.Acquire a contract or option to buy such stock or securities. If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale. 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 includes the holding period for the stock or securities sold. Example 1. You buy 100 shares of X stock for $1,000. You sell these shares for $750 and within 30 days from the sale you acquire 100 shares of the same stock for $800. Because you bought substantially identical stock, you cannot deduct your loss of $250 on the sale. However, you add the disallowed loss ($250) to the cost of the new stock ($800) to obtain your basis of the new stock, which is $1,050.