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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU) -- Ignore unavailable to you. Want to Upgrade?

To: PartyTime who wrote (17293)	12/27/1998 10:38:00 PM
From: Jon Tara	Respond to of 18444

"Perhaps you should sell it and then immediately buy it back. " FYI, you can't do that. You have to wait 30 days, or it becomes a "wash sale" and you can't take the loss. You're not totally screwed, though, because you then increase your cost basis on the bought-back shares. Example: You buy 100 shares of XYZ at 10. On December 30, you sell 100 shares of XYZ at 5. You buy back 100 shares of XYZ on January 2, 4 for 4 1/2. You have a "wash sale". You have realized a $500 loss, but you can NOT deduct the lost in 1998. Instead, you increase your cost basis on the new shares. Although you only paid $450 for the new shares of XYZ, your cost basis is $950. If you subsequently sold the shares for 20, you would pay taxes on a gain of only $1050, not the actual $1550 gain. If you wait 30 days before buying the stock back, you do not have a wash sale, and can claim the loss in 1998.