Message Font: Serif | Sans-Serif
 
No. of Recommendations: 3
Question on wash sales. I own a lot of one security. Did well this year, made some money, but most recently purchased shares are down. I may want to do some tax loss selling to offset earlier gains. Assume I bought 100 shares on Nov 20, 100 on Nov 27, 200 on Dec 2. and 200 on Dec. 4. Can I designate the shares to sell and sell all the stock purchased in Dec. on Dec 31 and avoid loss sale rules or not? Assume I will not repurchase within 31 days following Dec. 31. Thanks in advance for any help on this one, and let me know if not enough facts.
Print the post Back To Top
No. of Recommendations: 0
<< Assume I bought 100 shares on Nov 20, 100 on Nov 27, 200 on Dec 2. and 200 on Dec. 4. Can I designate the shares to sell and sell all the stock purchased in Dec. on Dec 31 and avoid loss sale rules or not? Assume I will not repurchase within 31 days following Dec. 31. >>

You'll be fine. Just make sure that you follow the rules for designating the shares you're selling.

Phil Marti
Tax Preparer
Print the post Back To Top
No. of Recommendations: 0
Saltman512 writes (in part):

Can I designate the shares to sell and sell all the stock purchased in Dec. on Dec 31 and avoid loss sale rules or not?

I reply:

No. The markets will be closed on December 31 for the New Year holiday. But your plan will work if you sell on December 30. --Bob
Print the post Back To Top
No. of Recommendations: 0
Looks like a difference of opinion. I will have to read Publication 550 and see if I can determine an answer--or call my acct. Thanks. (I will have to check on market being closed, I thought open a half day but did not know for sure) THanks
Print the post Back To Top
No. of Recommendations: 0
Saltman512 writes (in part):

Looks like a difference of opinion.

I reply:

I don't think so. We both agree that you can do what you've described, as long as the market is open. --Bob
Print the post Back To Top
No. of Recommendations: 0
If my memory serves me correctly (it doesn't always) Bob and Phil are both wrong. I believe Publication 550 will explain that you cannot take a loss on any position which you have bought within the 30 day period before or after your sale.
Print the post Back To Top
No. of Recommendations: 0
Your shares which were purchased at a loss prior to 12/31 are fair game to realize at a loss obviously. You can certainly direct those as losses otherwise the sales I would assume would be executed "FIFO"- first in first out. "Directing" sales and not labelling them as "tax-loss" trades would be disallowed. Hope this helps.
Print the post Back To Top
No. of Recommendations: 1
If my memory serves me correctly (it doesn't always) Bob and Phil are both wrong. I believe Publication 550 will explain that you cannot take a loss on any position which you have bought within the 30 day period before or after your sale.

I'm not sure how you're interpreting: (1) Publication 550, and (2) the original post, but I think if you will re-read both you will agree with Bob & Phil.

The original post talks about:
- A purchase made on November 20
- Several purchases in December
- A sale, made after December 21, of the shares
purchased in December
- Diligent effort made to avoid re-purchasing any
identical/similar shares until 31 days after the sale
The Wash Sale Rule does not come into the picture, because there is no remaining position representing a purchase made within a 30-day period before or after the sale.

You can certainly purchase shares, and sell them the same day or any time within 30 days, and claim a loss if appropriate, if those are the only transactions involving that stock within that 60-day period.

Phooley
Print the post Back To Top
No. of Recommendations: 0
Theotherme writes:

If my memory serves me correctly (it doesn't always) Bob and Phil are both wrong. I believe Publication 550 will explain that you cannot take a loss on any position which you have bought within the 30 day period before or after your sale.

I reply:

Good news: we're all right! The poster's original question assumed that there would be no disqualifying purchases. --Bob
Print the post Back To Top
No. of Recommendations: 0
YOU DON'T MENTION HOW MANY SHARES YOU WANT TO SELL.
Print the post Back To Top
No. of Recommendations: 1
Yes, you can designate which shares are to be sold. You have to do it in writing. If you use a live broker, tell him/her at the time you place the trade that you are selling these particular shares. Then you must follow up with a letter. I'm not sure how you can do this with an on-line broker; I do know you must specify which shares are to be sold before the order is given, then follow up in writing.
Print the post Back To Top
No. of Recommendations: 0
...Hi Guys,

I've read this thread and you have answered the first part of my three-part question on "wash sales" (an old one I'm sure, but I still remain unclear on this second & third part & before I went foolishly off to get really confused reading the IRS's version of the rule, I thought I'd see what some real Fools had to say first)....I'll try to be clear & simple:

Part 2 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I bought 100 shares of "XYZ" Dec 1,1999 &

3. I sold 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?

4. What if I buy 100 shares of "XYZ" Dec 3,1999 ?


Part 3 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I sell 100 shares of "XYZ" Dec 1,1999 &

3. I bought 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?

Thanks in advance,
Qwickdraw

Print the post Back To Top
No. of Recommendations: 1
Qwickdraw writes (in part):

Part 2 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I bought 100 shares of "XYZ" Dec 1,1999 &

3. I sold 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?

4. What if I buy 100 shares of "XYZ" Dec 3,1999 ?

Part 3 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I sell 100 shares of "XYZ" Dec 1,1999 &

3. I bought 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?


I reply:

In every case you describe, the wash sale rule will prevent you from claiming the loss on your current year taxes. In Part 2, the December 1, 1999, purchase will be deemed to be a repurchase. In Part 3, the December 2, 1999, purchase will be deemed to be a repurchase. Since in both cases the repurchase occurred within 30 days before or after the sale for loss, the wash sale rule applies. --Bob
Print the post Back To Top
No. of Recommendations: 0
<< Qwickdraw writes (in part):

Part 2 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I bought 100 shares of "XYZ" Dec 1,1999 &

3. I sold 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?

4. What if I buy 100 shares of "XYZ" Dec 3,1999 ?

Part 3 If:

1. I bought 100 shares of "XYZ" Dec 1,1998 &

2. I sell 100 shares of "XYZ" Dec 1,1999 &

3. I bought 100 shares of "XYZ" Dec 2,1999

can I take a loss against the 100 shares bought on Dec 1,1998?

I reply:

In every case you describe, the wash sale rule will prevent you from claiming the loss on your current year taxes. In Part 2, the December 1, 1999, purchase will be deemed to be a repurchase. In Part 3, the December 2, 1999, purchase will be deemed to be a repurchase. Since in both cases the repurchase occurred within 30 days before or after the sale for loss, the wash sale rule applies. --Bob >>

Ordinarily I hate "I agree" posts, but I agree. I post this simply because I chimed in on the original. The difference here is that, unlike the original set of facts, there is no 60-day period surrounding the sale that is purchase free. Thus the wash sale rules kick in. Simple, isn't it <big grin>.

Phil Marti
Tax Preparer
Print the post Back To Top
Advertisement