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Author: koelle One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Capital Gains/Losses -- Help! Date: 8/6/2001 5:37 PM
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One of my long term stock holdings is being bought out for cash by another company. I'll have something like a $3600 loss on that one.
I plan tosell one of my winners to offset the loss, and buy it back the same day or the next day, It will offset the loss and my holding period starts on the new purchase date?
There is not a reverse rule about wash sales that might apply to this, is there?
Thanks
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Author: agentpreppie Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53113 of 121585
Subject: Re: Capital Gains/Losses -- Help! Date: 8/6/2001 5:44 PM
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I plan tosell one of my winners to offset the loss, and buy it back the same day or the next day

You will have a wash sale in which case you cannot recognize the gain. Don't worry about offsetting your loss. You get to recognize $3000 of it this year (assuming no gains) and carry $600 forward indefinately.

Agent

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Author: Charlie48K Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53114 of 121585
Subject: Re: Capital Gains/Losses -- Help! Date: 8/6/2001 5:53 PM
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One of my long term stock holdings is being bought out for cash by another company. I'll have something like a $3600 loss on that one.
I plan tosell one of my winners to offset the loss, and buy it back the same day or the next day, It will offset the loss and my holding period starts on the new purchase date?
There is not a reverse rule about wash sales that might apply to this, is there?


See IRS Publication 550, page 53. Wash sales apply only to losses. If you have no gains, you do better by using the loss to offset ordinary income. Why use it against a gain which could be long term with better tax treatment? You can use $3000 against ordinary income after applying it against any capital gains. The excess carries forward until used.


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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53116 of 121585
Subject: Re: Capital Gains/Losses -- Help! Date: 8/6/2001 6:05 PM
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There is not a reverse rule about wash sales that might apply to this, is there?

As noted before, the wash sale rule doesn't apply to your situation, since you'd be rebuying a stock that you sold for a gain. Also heed the advice about not selling just to create a gain to offset the loss. The loss is at least, if not more, valuable to you when applied against ordinary income.

The one possible exception would be if you want to reset your holding period to take advantage of the new 5-year holding period. You can read more about in the FAQ.

Phil Marti

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Author: Gargoyle4Elysium Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53171 of 121585
Subject: Re: Capital Gains/Losses -- Help! Date: 8/7/2001 7:31 PM
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Investing stuff can be very confusing.
I recommend using GainsKeeper to handle this for you. They track your stocks and even auto update wash-out sales (which is the most confusing of all of them!).
Check them to see if it'll help: http://www.gainskeeper.com/

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