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Thanks for the info. I guess the rational for the 30 day waitso someone is at risk for 30 days rather than buying and selling on the same day. But don't understand the logic of the 30 days prior to the sale also being excluded. Do you?

I'd never be such a Pollyanna as to assume that there's always reason behind something Congress does. Remember, they're the ones who brought us a "Stop Me before I Spend Again" balanced budget amendment to the Constitution, when all they had to do, without the need of states' approval, was pass a balanced budget. However, in this case it makes sense. I don't believe the reasons is the "at risk" that you mention. I think the purpose of the wash sale rule is to prevent manufactured losses while the taxpayer maintains the same position in the stock.

In that case, it doesn't really matter whether you buy the replacement shares before or after you sell for a loss. They want you out of the position for 30 days if you're going to recognize the loss.


4/1: Buy 100 shares XYZ
5/1: Buy 100 shares XYZ
5/2: Sell 100 shares XYZ at a loss

Your position in XYZ has been and continues to be 100 shares, except for the temporary blip when your purchased the replacement shares

4/1: Buy 100 shares XYZ
5/15: Sell 100 shares XYZ at a loss
5/16: Buy 100 shares XYZ

The temporary blip in your position of 100 shares here is the one day that you have zero shares.

Phil Marti
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