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Strategies & Market Trends : IRS, Tax related strategies--Traders -- Ignore unavailable to you. Want to Upgrade?

To: softcash who wrote (531)	10/25/1998 11:31:00 AM
From: Kaye Thomas	Read Replies (2) \| Respond to of 1383

There's a common point of confusion about the wash sale rule, and your question zeros in on it. You don't have a wash sale if the stock you're selling is reducing the size of a position you bought less than 30 days earlier. Here's your first example: Buy 3000 stock x at 10 May 1 Sell 1000 stock x at 8 May 15 Sell 2000 stock x at 11 May 31 If we assume you didn't own any of stock x before the May 1 purchase, your sale on May 15 isn't a wash sale, even though there was a purchase less than 31 days earlier. You sold the same shares you purchased, so the shares you bought can't be replacement shares. I'm in the process of revamping and expanding the guidance on wash sales available on my web site, and will cover this issue in the new version (which will be several web pages in place of the single page currently appearing at fairmark.com ). Kaye Thomas, author Fairmark Press Tax Guide for Investors fairmark.com