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AngelMay writes (in part):

6/30/99 Bought 50 YHOO @160
7/2/99 Bought 50 YHOO @177.0
7/13/99 Bought 50 YHOO @151.1875
7/29/99 Bought 50 YHOO @134.5625

At this point I decided YHOO was a little risky and got nervous. So:

8/13/99 Sold 50 YHOO @132.5625
(The shares sold were those purchased for 177 on 7/2/99)


I reply:

As you surmised, the 7/29/99 purchase makes the 8/13/99 sale for loss a wash sale. Here's how to calculate the consequences.

First, figure out the amount of your "wash loss." In your case, this is WL = (44.4375 * 50 shares) + commissions. Next, calculate the "normal" basis of the replacement shares. In your case, the replacement shares are the shares bought on 7/29/99, so the "normal" basis will be (134.5625 * 50 shares) + commissions. Finally, add the "wash loss" to the "normal" basis of your replacement shares. As far as the IRS is concerned, that sum is your basis in your 7/29/99 shares. In your case, when you eventually sell that sum will be (179* 50 shares) + 2 commissions. --Bob
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