| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 80.1 | | VMSDEV::HAMMOND | Charlie Hammond -- ZKO3-04/S23 -- dtn 381-2684 | Tue Feb 25 1992 14:04 | 8 |
| >I bought some shares of a stock and sold them within a month at a loss. I
>did not execute any other trades during the month. Can I deduct the loss or
>this is a wash sale?
A "wash sale" occurs when you first sell shares (which you already
owned) and then buy back the same (or equivalent) shares. What you
describe is not a wash sale. You have a short term capital loss,
which reduces your taxable income.
|
| 80.2 | wash sale period extends 30 days both ways | CSSE::NEILSEN | Wally Neilsen-Steinhardt | Thu Feb 27 1992 12:51 | 17 |
| .1> A "wash sale" occurs when you first sell shares (which you already
> owned) and then buy back the same (or equivalent) shares. What you
> describe is not a wash sale. You have a short term capital loss,
> which reduces your taxable income.
The law does not distinguish the order of the purchase and sale.
If you were holding identical shares at the time, this would be a wash.
If not, not.
Strangely enough, you would report it the same in either case: Bought on Dec 1,
sold on Dec 2, with a loss that you can claim.
The wash sale rule only prevents you from claiming the presumably larger loss
on stock you may hold from an earlier purchase.
|
| 80.3 | Using the wash sale loss | VINO::SPIELMAN | smart i/o wins by default | Fri Feb 28 1992 19:43 | 24 |
| I agree with .-1 w.r.t. what constitutes a wash sale.
However my understanding of the tax situation is this. If you create a
wash sale, the loss you had been hoping to take cannot be taken as of
that sale. But, you eventually get to make use of the amount of the
loss which you wanted. When? When you later sell the other lot of stock
you own; you get to add the amount of the loss you had originally
wanted to take to the cost basis of the lot you are now selling.
The net effect is that you simply have to defer the "wash" loss to a
later time. Now for my question:
Presumably, if you only had one chunk of stock left in this company
after the wash sale, and you sell that, you should be able to use
the "wash" loss. I don't think any time factor applies when you
decide to sell this last chunk of stock that you own. So if you sell
it all, I would think that you can add in the "wash loss" that was
defered.
But what if you sell less than all within 30 days of those other
transactions. Then the wash rule again applies ? So until you let 31
days go buy between transactions of this company, you have to keep
defering the losses. Is this the reality ?
|
| 80.4 | Wash Sales | WMODEV::GERARDI_B | America's PSG | Fri May 03 1996 12:20 | 9 |
| How does this work when what you buy back is less than what you sold?
What is the effect on a Mutual fund?
That is, I want to sell 40 shares which I bought at 20.75 back in
September, but I have an automatic purchase on the 15th for $75, the
NAV is now 20.02. Am I better off skipping the purchase this month?
Bart
|
| 80.5 | .4 describes a wash sale | ESOSRV::BATOR | | Fri May 03 1996 12:49 | 14 |
| re: .4 This applies to any security, including mutual funds.
You propose to:
first, sell shares purchased at 20.75 at current NAV 20.02 i.e. loss
then second, buy back same fund (thru the $75 automatic purch on 15th)
If you read .0,.1, etc, this constitutes a wash sale. Note: You can still
do it. The only restriction is that the loss you hoped to
establish and claim (20.02-20.75) can not be deducted on your taxes
as a loss. IMO, if you really need the cash, why not hold the old
stock, and use the cash from the new purchase, instead of buying
more, to spend as you wish. You will still own the stock and will
still be able to claim your loss in the future (unless fund
turns around).
|
| 80.6 | well | WMODEV::GERARDI_B | America's PSG | Fri May 03 1996 13:15 | 8 |
| Thanks.
Well, I need $800. My auto-purchase is only $75. Do I lose *all* of
the loss, or just a portion, and if it's a portion, what metric is
used?
Bart
|
| 80.7 | | 2155::michaud | Jeff Michaud - ObjectBroker | Fri May 03 1996 14:05 | 14 |
| > Do I lose *all* of
> the loss, or just a portion, and if it's a portion, what metric is used?
Well you really should pick up (or ftp) IRS pubs 525 and 550.
In any case, you never *lose* the loss from a tax point of view,
as the loss the wash rules prevent you from claiming on that
sale is added to the basis of the new shares (ie. basically
you defer the loss until you sell the shares purchased that
resulted in the wash in the first place).
Note also that IRS pubs also indicate some gains in certain
situations can be defered if you repurchase shares within
a certain amount of time.
|