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To any tax gurus out there!

Perhaps you can check my calculations on the Wash Sale (I hope, my first and last wash sale). I purchased stock at various times in 1999, for a total of 230 shares at a total cost of \$23,272.74. On 09-20-99, I sold 230 shares for \$19,057.99, for a \$4,214.76 loss. Bought back 100 shares on 09-22-99 for \$9,044.50. one hundred shares of two hundred thirty shares is .443%, so .566% of 4214.76 (loss) is \$2,385.55, which I guess is my loss? Remainder of the loss, 4,214.76 minus 2,385.55 is \$1,829.21, which I guess is added to the cost of 100 shares, \$1,829.21 + 9,044.50 = 10,873.71, for my new cost basis on 100 shares.

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smfish writes:

Perhaps you can check my calculations on the Wash Sale (I hope, my first and last wash sale). I purchased stock at various times in 1999, for a total of 230 shares at a total cost of \$23,272.74. On 09-20-99, I sold 230 shares for \$19,057.99, for a \$4,214.76 loss. Bought back 100 shares on 09-22-99 for \$9,044.50. one hundred shares of two hundred thirty shares is .443%, so .566% of 4214.76 (loss) is \$2,385.55, which I guess is my loss? Remainder of the loss, 4,214.76 minus 2,385.55 is \$1,829.21, which I guess is added to the cost of 100 shares, \$1,829.21 + 9,044.50 = 10,873.71, for my new cost basis on 100 shares.

You're correct that you have a wash sale, but you can't divvy up the basis of the underlying shares in the way you describe. You need to calculate for each separate purchase whether you had a gain or a loss. Once you've located the first 100 shares on which you sustained a loss, you can stop. The loss on those 100 shares is disallowed and added to the basis of the shares you purchased on September 22. You may recognize your remaining loss.

This analysis assumes that you purchased no shares on or after August 21, 1999. If this assumption is wrong, than you may have had another wash sale. If you post back with dates and figures, someone may be willing to give you more detailed help. If you do, please format the figures to be easily readable. Thanks. --Bob
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Thanks for the info. Bob78164.
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smfish writes:

Perhaps you can check my calculations on the Wash Sale (I hope, my first and
last wash sale). I purchased stock at various times in 1999, for a total of 230
shares at a total cost of \$23,272.74. On 09-20-99, I sold 230 shares for
\$19,057.99, for a \$4,214.76 loss. Bought back 100 shares on 09-22-99 for
\$9,044.50. one hundred shares of two hundred thirty shares is .443%, so .566%
of 4214.76 (loss) is \$2,385.55, which I guess is my loss? Remainder of the loss,
4,214.76 minus 2,385.55 is \$1,829.21, which I guess is added to the cost of 100
shares, \$1,829.21 + 9,044.50 = 10,873.71, for my new cost basis on 100 shares.

You're correct that you have a wash sale, but you can't divvy up the basis of the
underlying shares in the way you describe. You need to calculate for each separate
purchase whether you had a gain or a loss. Once you've located the first 100 shares
on which you sustained a loss, you can stop. The loss on those 100 shares is
disallowed and added to the basis of the shares you purchased on September 22.
You may recognize your remaining loss.

This analysis assumes that you purchased no shares on or after August 21, 1999. If
this assumption is wrong, than you may have had another wash sale. If you post back
with dates and figures, someone may be willing to give you more detailed help. If you

I think shat Bob is saying is that the problem is that you can't use profitable trades to offset losses on the same date. I think you have to take all the shares on which you had a gain and report them (you can probably make this one trade with "various" as purchase date). Then the remaining total loss is pro-rata on a share basis versus the 100 Replacement shares to determine your Wash Sale, adjustment, and basis and date change on the 100 shares. Since they are all losses you can bunch them together with "various" as purchase dates.
Ed
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edcosoft writes (in part):

Then the remaining total loss is pro-rata on a share basis versus the 100 Replacement shares to determine your Wash Sale, adjustment, and basis and date change on the 100 shares.

Not necessarily. You must also use FIFO accounting to determine which losses are disallowed if the sale of more than 100 shares (the number of replacement shares purchased) resulted in a loss. For example, suppose you had three separate purchases of 50 shares each, all of which resulted in losses of various sizes (because they were purchased at different prices), together with another purchase of 80 shares that resulted in a gain. Then the loss on the two earlier 50-share lots is disallowed, but the loss on the final 50-share lot is realized in full. You do NOT take disallow two-thirds of the entire loss due to the wash sale rule, you disallow the loss on two-thirds of the shares, which may well be different. --Bob
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Then the remaining total loss is pro-rata on a share basis versus the 100 Replacement shares to determine your
Wash Sale, adjustment, and basis and date change on the 100 shares.

Not necessarily. You must also use FIFO accounting to determine which losses are disallowed if the sale of more than 100
shares (the number of replacement shares purchased) resulted in a loss. For example, suppose you had three separate
purchases of 50 shares each, all of which resulted in losses of various sizes (because they were purchased at different
prices), together with another purchase of 80 shares that resulted in a gain. Then the loss on the two earlier 50-share lots is
disallowed, but the loss on the final 50-share lot is realized in full. You do NOT take disallow two-thirds of the entire loss
due to the wash sale rule, you disallow the loss on two-thirds of the shares, which may well be different. --Bob

I stand corrected, you're right Bob. I presume you agree with the other part of my post? ed
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edcosoft writes (in part):

I presume you agree with the other part of my post?

Yep. Your software does handle this situation correctly, doesn't it? ;-) --Bob
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edcosoft writes (in part):

I presume you agree with the other part of my post?