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.

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

To: softcash who wrote (535)	10/25/1998 1:17:00 PM
From: Brendan W	Respond to of 1383

You report a short-term gain of 2,000 on the first lot and a short-term loss of $2,000 on the second lot for a net short-term gain of $0. No tax is due... but, no, the basis does not roll forward. Instead, gains and losses are netted against each other. It gets more complicated when you have gains and losses of different holding periods (short vs. long term). You wrote: >>>>>>> Thanx Kaye, but what confuses me is.. Buy 3000 stock x at 10 May 1 Sell 1000 stock x at 8 May 15, lost $2,000 Sell 2000 stock x at 11 May 31 gain $2,000 How much gain do I report to the IRS in this example? If it is zero, then the loss on May 15th in the above example must have been added to the basis of the stock that was sold on May 31st?

To: softcash who wrote (535)	10/25/1998 3:18:00 PM
From: Kaye Thomas	Read Replies (1) \| Respond to of 1383

Buy 3000 stock x at 10 May 1 Sell 1000 stock x at 8 May 15, lost $2,000 Sell 2000 stock x at 11 May 31 gain $2,000 How much gain do I report to the IRS in this example? If it is zero, then the loss on May 15th in the above example must have been added to the basis of the stock that was sold on May 31st? Assuming these are your only transactions, you report a loss of $2,000 on the May 15 sale, and a gain of $2,000 on your May 31 sale. You don't add the loss to the basis of the stock sold on May 31 because you don't have a wash sale. You simply have a sale on which the loss is reported like any other sale at a loss. If there are no other transactions on your tax return, you'll have $2,000 as a loss and $2,000 as a gain, with a net gain/loss of $0. Kaye Thomas, author Fairmark Press Tax Guide for Investors fairmark.com