The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/reinvesting-roth-liquidated-for-a-tax-loss-27252314.aspx

Subject:  Reinvesting Roth liquidated for a tax loss Date:  12/7/2008  4:40 PM
Author:  klwilbur2008 Number:  102822 of 121599

Hello,

I searched the forums and found many answers regarding this issue, but not the specific question I am posing.

Is there any regulation preventing me from reinvesting funds from liquidating Roth accounts in 2008 into NEW Roth accounts (albeit different funds to avoid "wash sale" rules) also in 2008? The liquidation was performed in order to claim a Schedule A tax loss for year 2008.

Background: I have two Vanguard Roth accounts (one under my name, one under my wife's name) that have lost a total of $3540 and now total $5146. This amount is less than my principal contribution and can be withdrawn with no penalty. I plan to liquidate these Roth accounts in a few days in order to claim the $3540 loss (minus 2% of my 2008 AGI) as a miscellaneous exemption on Schedule A. I would like to immediately reinvest the $5146 this year back into new Vanguard Roth accounts, but different funds in order to avoid "wash sale" rules which would require a wait of 30 days.

My question is this: Are there any additional regulations (beside the "wash sale" rule) that prevent me from reinvesting the funds into a new Roth in the same year that I claim the loss?

Thanks,

Kelly
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us