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Financial Planning / Tax Strategies
|Subject: Re: The accursed wash sale rules.||Date: 12/20/2000 4:03 PM|
|Author: Crosenfield||Number: 43179 of 121219|
You have it right.
You are now out of WCOM. If you STAY out for 31 days, you can claim the whole loss on your 2000 taxes.
Technically the first sale is a wash sale because of your inadvertent buy when you intended to sell. If you therefore follow the wash sale rule, the loss is carried forward to add to your cost basis of the next buy. Somebody can correct me if wrong, but this may make your long term loss into a short term loss, meaning it would first be netted against short term gains, if that makes any difference.
Usually tax rules are set up to confound any attempt to get out of paying taxes, but it would seem that potentially this could leave you with left-over long, rather than short term gains and therefore save you some taxes. You'd rather have long term gains, so you'd prefer short term losses. I suspect there's some technicality somewhere to keep you from doing that; if so somebody will chime in.
Best wishes, Chris
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