Message Font: Serif | Sans-Serif
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: I'm Impressed Date: 1/10/2011 6:38 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
RV2000 writes (in part):

I put in a limit sell order for a stock on Dec 23rd. It traded on Jan 5 and settled on the 6th. I bought back in again on Jan 7th after a large decrease in price. Is this what I've heard called a wash sale? If I sell at a loss in Feb can I offset last year's gain against this year's loss next year? Or do I do it this year?

I reply:

Let me make sure I understand you correctly. On December 23, 2010, you placed a limit sell order for one of your holdings. However, the order didn't actually execute until January 5, 2011, which was your trade date. You then repurchased the stock on January 7, 2011.

You do not have a 2010 transaction at all, so this transaction will not be reported on your 2010 return (which you'll file by April 2011, unless you request an extension). (After all, at the end of the year, it was possible that the stock might never have reached the price that triggered your sell order.) You have a pair of 2011 transactions.

We are missing a crucial piece of information to determine whether the wash sale rules will affect your tax reporting. Was the January 5 sale at a gain or a loss? If a loss, then the repurchase on January 7 triggered the wash sale rule. If a gain, you have a taxable gain.

In any event, there is no provision that would permit you to carry back a 2011 capital loss to offset 2010 capital gains. --Bob
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next


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.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
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.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! 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.