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.

Biotech / Medical : VVUS: VIVUS INC. (NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Linda Kaplan who wrote (3927)	12/19/1997 10:53:00 PM
From: Gary Strike	Read Replies (1) \| Respond to of 23519

Linda, if they sell the bought back batch, and don't buy back for 30 days, the NET loss may be realized. I'll reprint the example from Lasser's. Your example is addressed in step 3. EXAMPLE: 1. You bought common stock of Appliance Co. for $10,000 in 1981. On June 27, 1996, you sold the stock for $8,000, incurring a $2,000 loss. A week later, you repurchased the same number of shares of Appliance stock for $9,000. Your loss of $2,000 on the sale is disallowed because of the wash-sale rule. The basis of the new lot becomes $11,000. The basis of the old shares ($10,000) is increased by $1,000, which is the excess of the purchase price of the new shares ($9,000) over the selling price of the old shares ($8,000). 2. Assume the same facts as in Example 1 except that you repurchase the stock for $7,000. The basis of the new lot is $9,000. The basis of the old shares ($10,000) is decreased by $1,000, which is the excess of the selling price of the old shares ($8,000) over the purchase price of the new shares ($7,000). 3. Assume that in February 1996 you sell the new lot of stock acquired in Example 1 above for $9,000 and do not run afoul of the wash-sale rule. On the sale, you realize a loss of $2,000 ($11,000 - $9,000). So you see, you can always eventually realize your net loss if you sell and don't buy back for 30 days. Hopefully your net is a gain. Hope this helps.

To: Linda Kaplan who wrote (3927)	12/19/1997 11:01:00 PM
From: Slim Pickens	Read Replies (1) \| Respond to of 23519

<<If they sell the bought-back batch, do they get the first loss, or is the first loss gone as a deduction forever?>> I recently researched this very question, and the answer is......... "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." From Publication 550 for 1996 returns. Pub 550 not available for 1997 yet.