Message Font: Serif | Sans-Serif
No. of Recommendations: 1
(1) 100 shares purchased on 06/01/2001 at $40/share

(2) 100 shares purchased on 07/02/2001 at $50/share

(3) 100 shares purchased on 08/01/2001 at $30/share

(4) 100 shares from 06/01/2001 redeemed on 08/08/2001 at $40/share

(5) 100 shares from 07/02/2001 redeemed on 08/09/2001 at $40/share

Would/could step #4 be considered a wash sale or not?

No. Without a loss, there can't be a wash sale.


If not, then the only shares still held after step #4 are 100 shares purchased on 07/02/2001 and 100 shares purchased on 08/01/2001. Next, step #5 would result in a wash sale, where there would be a disallowed $10/share loss on the shares purchased on 07/02/2001. The replacement shares bought on 08/01/2001 would have their effective purchase date changed to 07/02/2001, and their original cost basis of $30/share would be increased by $10/share to $40/share.


Now if steps #4 and #5, respectively, became

(4) 100 shares from 06/01/2001 redeemed on 08/08/2001 morning at $40/share

(5) 100 shares from 07/02/2001 redeemed on 08/08/2001 afternoon at $40/share

then I don't see any reason for a difference in the tax results.

There isn't a difference. You have 100 shares with a basis of $40 and no bottom line recognized loss.

Maybe someone else can find a better way of explaining this to you.

Phil Marti
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.