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First of all, establishing a cost basis on a stock within an IRA is irrelevant. [You pay taxes on the distributions of an IRA based on the taxable amounts versus the already taxed contributions. Whether your cost basis is $1,000 or $5,000 on that stock doesn't matter, it doesn't change what your overall taxed contribution amount is. You're still going to pay the same amount in taxes.]

As for Randy: "So what happens to this $92k loss? Lost. Gone completely. Nobody will receive any tax benefit from this loss. It was carried by Randy to the grave."

Right, like it should be. This was Randy's loss, why would anyone else expect to receive a tax benefit from it? Randy is gone, so is the loss. This is not absurd.

I don't believe the original intent of the wash rules were to completely eliminate taking any losses, just to postpone them until the new shares are sold. But, since within an IRA that loss cannot be realized when the shares are sold, I don't believe that a wash sale occured. My 2 1/2 cents.
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