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Author: pxghodgue Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 122466  
Subject: mergers and wash sale rule Date: 12/27/2000 8:17 PM
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JDSU is in the process of merging with SDLI with 3.8 shares of JDSU being exchanged for each share of SDLI. The merger is supposed to close sometime in Jan 2001.

Consider the following scenario (hypothetical numbers),

On 06/10/2000, I bought 10 shares of JDSU at $100 each.
On 12/10/2000, I bought 8 shares of SDLI at $250 each.

On 12/15/2000, I sold 10 shares of JDSU to take a tax loss at $47 each.

On 12/20/2000, I bought 2 more shares of SDLI (coz of a drop in price) at $140 each!

How does a merger affect the wash sale rule? Assuming that the merger closes after 01/22/2001, can I still take a tax loss on the JDSU sale assuming I don't buy JDSU before 01/22/2001?

Thanks a lot.
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