The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: wash sales for shares with zero gain/loss?||Date: 8/12/2001 4:33 AM|
|Author: asmolik||Number: 53252 of 123001|
I was wondering if there would be any information on whether the sale of shares with zero gain/loss could legitimately qualify as a wash sale. Put another way, when sale price equals cost basis for a sale of shares, it could be considered a loss just as correctly (or just as incorrectly) as it could be considered a gain, so the question is whether the taxpaying investor could use the benefit of the doubt to his/her own advantage. Here is an example:
100 shares of XYZ are purchased at n = $40/share on 06/01/2001.
100 shares of XYZ are purchased at $50/share on 07/02/2001.
100 shares of XYZ are purchased at $30/share on 08/01/2001.
The 200 shares of XYZ purchased on 06/01/2001 and 07/01/2001 are sold at $40/share on 08/08/2001.
The question would be (1) whether the 100 shares purchased on 08/01/2001 could be considered to have “washed away” the 100 shares purchased on 06/01/2001, hence allowing the $10/share capital loss on the 100 shares purchased on 07/02/2001 to be realized (for a total loss of $1,000), or (2) whether the 100 shares purchased on 08/01/2001 would need to be considered to have washed away the 100 shares purchased on 07/02/2001, hence disallowing the capital loss on those shares (and realizing a zero gain/loss on the 100 shares purchased on 06/01/2001).
In graphical terms, suppose that any realized gain/loss on the 08/08/2001 sale above were cons