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Financial Planning / Tax Strategies


Subject:  Re: Wash sale rule question and capital losses Date:  7/11/2000  5:36 PM
Author:  TMFExRO Number:  37373 of 127549

<< Say I own 100 shares of company D, a relatively undifferentiated firm with several public competitors with very similar businesses. The stocks of all these firms move pretty much in tandem. Lets say company D is down 30% from where I bought it. If I sold the shares of company D and put that money immediately into a similar competitor whose shre price is down 27%, am I in danger of running afoul of the wash sale rule? >>

No. This is not a wash sale. The fact that the two companies are in the same sector doesn't make their stocks substantially similar.

<< Second question: How much of capital losses can I claim against my ordinary income? Any? >>

If you have a net capital loss you can use $3,000 of it on that year's return. Anything more is carried forward. There's an excellent article on netting of gains and losses in the FAQ.

Phil Marti
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