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Need some advice due to a really stupid move on my part. Here's the situation. I have purchased a total of 130 shares of Cymer (CYMI) in three different lots. The first two lots total 90 shares and show a substantial loss. Today (12/5), I decided to sell these 90 shares for a year-end tax loss, planning to try to pick shares up again after 31 days. Unfortunately, I forgot to check the purchase date on the remaining 40 shares, which happened to be 11/5. If I am correct in my interpretation of wash-sale rules, this would mean my capital loss would be disallowed on 40 of the shares I sold. Had I waited until Monday to sell, there would have been no problem.



What is my best option? If I sell the remaining 40 today, I should be able to deduct the loss as long as I don't repurchase any shares before Jan 6...am I right? Any other better options?



Thanks for your help,

Ben Davenport
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<<Need some advice due to a really stupid move on my part. Here's the situation. I have purchased a total of 130 shares of Cymer (CYMI) in three different lots. The first two lots total 90 shares and show a substantial loss. Today (12/5), I decided to sell these 90 shares for a year-end tax loss, planning to try to pick shares up again after 31 days. Unfortunately, I forgot to check the purchase date on the remaining 40 shares, which happened to be 11/5. If I am correct in my interpretation of wash-sale rules, this would mean my capital loss would be disallowed on 40 of the shares I sold. Had I waited until Monday to sell, there would have been no problem.

What is my best option? If I sell the remaining 40 today, I should be able to deduct the loss as long as I don't repurchase any shares before Jan 6...am I right? Any other better options?>>

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You are correct, except that by my count the first day you can repurchase after a sale today (December 5) and be outside the wash sale window is January 5, not January 6, because there are 31 days in December. The wash sale period covers 61 days: the date of sale and 30 days before and after.

This assumes your TRADE date for the purchase was November 5. If your trade date for that purchase was earlier, and November 5 was the settlement date, you are OK on the wash sale rules and can recognize the loss without selling the additional 40 shares.

Offhand I can't think of any way to recognize the loss this year without selling the additional 40 shares. I played around with the idea of buying back the 90 and then starting over, but as far as I can tell that won't get you anywhere. It's unfortunate the way the wash sale rule sometimes sneaks up on people.

KAT in Chicagoland
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<<What is my best option? If I sell the remaining 40 today, I should be able to deduct the loss as long
as I don't repurchase any shares before Jan 6...am I right? Any other better options?>>

KAT provided you with an answer that touched all of the bases...including the dates (I double checked by counting on my fingers and toes).

Nothing for me to add to his response. I hope that it all works out for the best for you.

TMF Taxes
Roy
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