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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121144  
Subject: Wash Sales AGAIN. Argh! Date: 10/15/2011 1:44 PM
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I sold some stock. Took a beating.
Had the same stock in both taxable and IRA accounts.
Lost money on both sales.

IF I buy the same stock back in my IRA - but NOT in the taxable account - before 30 days are up..... will the IRS thump me?

How could the loss (in my taxable account) be added to my cost basis on new shares in my IRA in any event?

This is very confusing.
Help!


AM
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114141 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 2:41 PM
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IF I buy the same stock back in my IRA - but NOT in the taxable account - before 30 days are up..... will the IRS thump me?

Yes. Wait until the 30 days are up before re-purchasing the stock.

If you're concerned about the stock price rising quickly, you could buy calls on the stock instead.

--Peter

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114142 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 3:00 PM
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IF I buy the same stock back in my IRA - but NOT in the taxable account - before 30 days are up..... will the IRS thump me?

Yes. Wait until the 30 days are up before re-purchasing the stock.

If you're concerned about the stock price rising quickly, you could buy calls on the stock instead.

--Peter




But what does "Yes" mean?
How does it work?
How do you add the taxable loss to your cost basis in an IRA? How would that work out since you don't report sales in an IRA on your taxes?

I just don't get it.
Help me understand this, please?

AM

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114143 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 3:05 PM
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But what does "Yes" mean?

Your question was:
IF I buy the same stock back in my IRA - but NOT in the taxable account - before 30 days are up..... will the IRS thump me?

That was a yes or no question. My answer is "yes".

Yes, the IRS will "thump" you, in that the loss will be disallowed as a wash sale and worse, since the repurchase is in an IRA, there is no adjustment to the replacement shares.

--Peter

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114144 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 3:14 PM
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Your question was:
IF I buy the same stock back in my IRA - but NOT in the taxable account - before 30 days are up..... will the IRS thump me?

That was a yes or no question. My answer is "yes".

Yes, the IRS will "thump" you, in that the loss will be disallowed as a wash sale and worse, since the repurchase is in an IRA, there is no adjustment to the replacement shares.

--Peter




AHA! Now I see.
Loss is not recoverable. What a bummer.
I don't think I like the IRS. :)

Thanks Peter!

AM

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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114147 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 3:37 PM
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I know this may be a stupid question.....However, here goes. If you wish to repurchase the same stock in your IRA, why did you sell it at a loss in that account to begin with? (I know, one should not end a sentence with a preposition.)

Donna

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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114148 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 3:42 PM
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I know this may be a stupid question.....However, here goes. If you wish to repurchase the same stock in your IRA, why did you sell it at a loss in that account to begin with?

Not a stupid question at all. Too late to do OP any good, but there are always lurkers.

(I know, one should not end a sentence with a preposition.)

Borrowing from some dead Brit, whose name has been replaced in my brain with martinis, that is the sort of nonsense up with which I will not put.

Phil
Rule Your Retirement Home Fool

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114149 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 4:16 PM
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I know this may be a stupid question.....However, here goes. If you wish to repurchase the same stock in your IRA, why did you sell it at a loss in that account to begin with? (I know, one should not end a sentence with a preposition.)

Donna



I panicked.

AM

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114150 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 4:21 PM
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I know you weren't doing this... but... it's real easy to tell someone else what to do and it's a whole lot harder when it's YOUR money you are watching vanish in HUGE amounts day after day... until you reach the point where you are wondering if the damned thing will go to Zero.

I made a mistake.
I panicked.
Sigh.

AM

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Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114152 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 5:56 PM
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I know you weren't doing this... but... it's real easy to tell someone else what to do and it's a whole lot harder when it's YOUR money you are watching vanish in HUGE amounts day after day... until you reach the point where you are wondering if the damned thing will go to Zero.

I made a mistake.
I panicked.
Sigh.



and you are ,of course, the only person at TMF who's made an investment decision and then regretted it two weeks later.


(>,

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114155 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/15/2011 7:07 PM
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and you are ,of course, the only person at TMF who's made an investment decision and then regretted it two weeks later.


(>,

----------


Yes...I'm pretty sure I am. :)

AM

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114158 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/16/2011 12:32 AM
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I made a mistake.
I panicked.
Sigh.

AM


Rebuying in the IRA before the 30 days would be a mistake.

You do have a few options:
1.) Buy the stock in your non-retirement account. It would create a wash sale, but the loss isn't voided.

2.) You could buy a competitor's stock.

3.) Look for a completely different good stock to buy.
After your previous transactions, you might have a little too much emotion invested in this stock.

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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114159 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/16/2011 12:46 AM
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AngelMay, back during the stock crash of 2001 (I believe), I felt the same way. But, I took my doctor's advice from my college days, took a few deep breaths, and held on for dear life. Same thing in 2008.

Now, I'm glad I held on.

Donna (who takes deep breaths quite often)

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114163 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/16/2011 10:28 AM
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3.) Look for a completely different good stock to buy.
After your previous transactions, you might have a little too much emotion invested in this stock.



It's not emotion that's invested in the stock - it's emotion invested in the money. I hate losing money. :)

I'll get it all back. It will just take a little time. Meanwhile, I'm disgusted with me. Gah! But...as I said... it's really difficult sitting there watching while HUGE amounts of your money vanish day after day right before your eyes.

If I were twenty - or thirty - or even forty - I might not have worried quite so much about it. But now that I'm eleventy-five years old it's very difficult.

But I'll get it back.
I'll get it back.
I'll get it back.
I believe.
I believe.
I believe.
;o)

And who knows? Maybe everything will have a big old burp before the 30 days is up which will give me a chance to get back in on my mark.
Meanwhile, I'm opting for your #2 and #3 above.

AM

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114164 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/16/2011 10:41 AM
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AngelMay, back during the stock crash of 2001 (I believe), I felt the same way. But, I took my doctor's advice from my college days, took a few deep breaths, and held on for dear life. Same thing in 2008.

Now, I'm glad I held on.

Donna (who takes deep breaths quite often)




Are you also eleventy-five years old? :)
If so, you are one cast-iron cookie.

Best I can do now is own up to the mistake and make every effort to recover.

I would like to add, however, (for those lurkers someone spoke of earlier) that my "gut" was saying hold AND sell at the same time. It was a toss-up and I chose the wrong side of that coin.

BUT - and here's the raw truth on this - the stocks I was holding were really good companies. Well-known and not a chance in hell of going under or out of business. IF the stocks I was holding were pink-slip stocks or tiny companies with a single product or a much smaller operation company there would have been no angst on my part. I would have sold them the minute I saw the first HUGE amount fly out of my account. I certainly would not have held and held and held thinking that any minute they could turn around.

There are lots of stocks out there that NEVER turn around. Friend last night mentioned "Garmin". My mistake was that I knew the stocks I was holding were going to turn around. Yet I sold. Idiot.

Two things going against me. My age: which means I just don't have the kind of time to recover that a younger person has. And second, my money: I had HUGE amounts invested. It wasn't just a couple hundred shares of a $15.60 stock. (I pulled that number out of a dark place. ;o)

What I'm trying to say is that every investor is different. Each investor's pile of investable money is different. Each stock/company is different. And all those things have to be taken into account before decisions can be made wrt buying and selling. And sometimes, in spite of everything, we are going to make the wrong call.

Then we just have to do the best we can to recover.
All I can say right now is "PHOOEY on WASH SALE RULES!"

:)

AM

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114167 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/16/2011 11:52 AM
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Two things going against me. My age: which means I just don't have the kind of time to recover that a younger person has. And second, my money: I had HUGE amounts invested. It wasn't just a couple hundred shares of a $15.60 stock. (I pulled that number out of a dark place. ;o)

What I'm trying to say is that every investor is different. Each investor's pile of investable money is different. Each stock/company is different. And all those things have to be taken into account before decisions can be made wrt buying and selling. And sometimes, in spite of everything, we are going to make the wrong call.


Maybe your investments are a too risky for your situation.

All I can say right now is "PHOOEY on WASH SALE RULES!"

You still have the option to rebuy in non-retirement accounts. It just defers the realization of the loss.

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Author: Donna405 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114186 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/17/2011 12:55 AM
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AngelMay, yes I am eleventy-five years old. However, I have repositioned my portfolios to contain mostly blue chip, dividend paying stocks, and cash. So far, so good. At this point, the dividends are reinvested into more stock. Perhaps, in about 8 years, I will no longer reinvest the dividends and start collecting $$$ to supplement my income.

Still need to sell one tech stock, but will hold off for now, as I see nowhere else to place the money.

Donna

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Author: AngelMay Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 114187 of 121144
Subject: Re: Wash Sales AGAIN. Argh! Date: 10/17/2011 9:13 AM
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Perhaps, in about 8 years, I will no longer reinvest the dividends a...


Sounds to me like you are a young whipper-snapper. ;o)

AM

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