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Author: T8466 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121099  
Subject: Wash Sales Date: 12/2/1998 9:10 AM
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In the Tax Q&A by Roy Lewis, he mentioned that Wash Sales only apply if the security is carried into two calendar years. I cannot find that notation in Pub 550- can anyone shed more light on this please? I appreciate it!!!
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Author: DowDanny Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6657 of 121099
Subject: Re: Wash Sales Date: 12/2/1998 10:33 AM
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>> In the Tax Q&A by Roy Lewis, he mentioned that Wash Sales only apply if the security is carried into two calendar years. <<

I think you should look again. The discussion of "two calendar years" probably had to do with "shorting against the box" rules and/or with warning/suggestions on how to identify wash sales on Sched D even if the position was only reopened in the following year after a DEcember sale.

BWDIK ?
-DD

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6705 of 121099
Subject: Re: Wash Sales Date: 12/2/1998 4:18 PM
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[[In the Tax Q&A by Roy Lewis, he mentioned that Wash Sales only apply if the security is carried
into two calendar years. I cannot find that notation in Pub 550- can anyone shed more light on this
please? I appreciate it!!!]]

That wasn't my intention...to apply that the wash sale rules ONLY apply if the security bridges two tax years.

What I was trying to say that if the stock isn't held in such a way to bridge two tax years, then the wash sale rules are really moot. It's as if the wash sale rules don't apply. Certainly they do, but in practice they simply become a non-issue.

I believe that the prior posts help to clear that up.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.


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Author: T8466 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6874 of 121099
Subject: Re: Wash Sales Date: 12/8/1998 8:29 AM
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Thanks Roy.. Am I correc to assume that even though this isn't in the Pub 550, it is in the Tax Code? Here's my situation. I bought and sold SEEK three times within a few days - one of which was at a loss - thereby creating a wash sale.. but I sold the entire position and have not bought and won't past 31 Dec.. so, from your interpretation, wash sale rules don't apply - or as you say, become moot? Thanks. Fool on.

thom

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6890 of 121099
Subject: Re: Wash Sales Date: 12/8/1998 10:27 AM
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[[Thanks Roy..]]

Welcome, Thom...

[[ Am I correc to assume that even though this isn't in the Pub 550, it is in the Tax
Code?]]

It really IS in Pub 550...just not directly. You have to "back into" the concept by doing the math. But let's move on.

[[ Here's my situation. I bought and sold SEEK three times within a few days - one of which
was at a loss - thereby creating a wash sale.. but I sold the entire position and have not bought and
won't past 31 Dec.. so, from your interpretation, wash sale rules don't apply - or as you say,
become moot?]]

In your example, the answer is yes.

Technically, you DO have a wash sale. And you would have to make all of the basis adjustment computations as required by the code.

But, since you sold out your position, if you do the math, you'll find that your total gain or loss on the transaction will be exactly the SAME...regardless of if you use the complicated wash sale computations or simply ignore those computations. Which is why I say that the computations become "moot".

Again, remember that the wash sale rules only come into play (effectively) when the wash sale bridges two tax years. Again...you can prove this to your self if you do the math. And if you are having trouble folling this line of logic and thinking, please let me know and I'll give you and example that will prove the point.

[[ Thanks. Fool on.]]

You are very welcome. And I will. You too!!!

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.


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