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Microcap & Penny Stocks : FRANKLIN TELECOM (FTEL) -- Ignore unavailable to you. Want to Upgrade?

To: detroit denny who wrote (38189)	9/30/1998 10:21:00 PM
From: Pat Garaffa	Read Replies (1) \| Respond to of 41046

To all regarding "wash sales": You can sell a security out of a taxible account and buy it back right away for your non-taxable account (IRA, Keogh, SEP, 401K, 403B, etc.) Of course, you must have the money already in the tax deferred account in order to purchase it, if you've already made your 1998 contributions. The taxable account gets credited with the gains and/or losses and the actual security ends up in the deferred account with the same value, minus commisions. Unfortunetely, you won't be in a position to use any future gains from the security until you reach your golden years. If you haven't made your 1998 contribution to your tax deferred retirement account you can get a double benefit. Sell the security out of your taxable account and take the loss. Then buy it back right away for your tax-deferred account and take the deduction on your 1998 taxes. That's my favorite! I'm not sure how this would work if you sold out of a taxable account and then bought back inside a Roth IRA since securitys in a Roth are supposed to be purchased "after tax". Regarding "similar security" purchases. This is acceptable as well. You may sell FTEL (if you've got a screw loose) and buy DGIV and still use the wash rule to your advantage. A gamble IMO. That scenario works best with mutual funds. You can sell off a looser and buy back an identical fund by another company and still use the wash rule to your advantage. Example: Sell Fidelity Small Cap Value fund for a loss and buy back a Janus Small Cap Value fund in the same account. Two different funds but they are both investing in the same style. If you want to stay invested in that style fund, but wish to offset another gain, this is the way to do it. Same holds true for an index fund. Example: The market tanks and you want to offset a gain. Dump your Vanguard Index 500 and buy back the Schwab Index 500. Take the loss and your still invested in the same index, only through another company. The IRS thinks they're smart, but all they're good at is confusing people and forcing accountants to go gray and get ulcers. If there is law, there is also a way around it. Good luck all! Pat