Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Does the wash sale rule apply when you sell all shares (some at a loss) purchased in different lots, of the same stock, if some of the lots were purchased within the 30 day period before the total liquidation of all of the position.

For Example:
Sept. 1) Bought XYZ 100 shares at $10.00 = $1000
Sept. 3) Bought XYZ 100 shares at $6.00 = $600
Total = $1600

Sept. 15) Sell XYZ 200 shares at $8.00 = $1600

Loss on first lot = $400
Gain on second lot = $400

I have sometimes used this method to recover losses from an ill-timed initial entry. Do the wash sale rules apply here, no matter how many lots were purchased to average down, and then all of the position was sold? I know I must claim the gain on the second lot, but will I be allowed to claim the loss on the first lot.

If I repurchase this security within 31 days will the loss be disallowed and the wash sale rule apply?

Thanks in advance for any offered help.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.