Message Font: Serif | Sans-Serif
No. of Recommendations: 0
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.
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.