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

To: RWalker who wrote (323)	12/27/1997 11:49:00 AM
From: Colin Cody	Read Replies (1) \| Respond to of 5810

Your example made me think a bit! So I re-did it a little... . In your example you hold NOTHING after the two sells, therefore you will recognise all losses... BUT perhaps you were subject to the wash sale rule, IF the two buys were TWO buys and not merely a single ticket that recived partial fills. . Here's another example more on point. Dec 1, you BUY 1,000 shares of INTC at $81 Dec 2, you BUY another 1,000 shares of INTC $78 Dec 3, you SELL 1,000 shares of INTC $76 . I THINK in this case we have a sale of the $81 shares for a $5 loss. The wash sale rule takes that loss and adds it to the $78 stock for a basis of $83. NO LOSS RECOGNISED. . Then WHEN you sell the next 1,000 shares of INTC you use the basis of $83 and recognize your loss (or lower your gain) AT THAT TIME. . NOW LOOKING AGAIN AT YOUR EXAMPLE. What if the trades were: Dec 1, you BUY 2,000 shares of INTC at $81 Dec 3, you SELL 1,000 shares of INTC $76 . It looks like there is NO WASH SALE RULE on this one. . Does not seem "fair" or "reasonable". But I think this is the case... . Comments from anyone? Did I overlook something here? . Colin