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URL:  https://boards.fool.com/wash-sale-examples-30427428.aspx

Subject:  Wash Sale Examples Date:  12/12/2012  9:22 AM
Author:  DanQuisenberry Number:  117120 of 129658

Greetings All,

I was hoping someone on the board might be able to help in answering a couple of hypothetical wash-sale questions.

1. I own IBM at a cost basis of 10000 for 3 years. I sell it today for a 3000 long-term gain to lock in 2012 tax rates. I then immediately repurchase IBM at a 13000 cost basis. It goes down in prices so I decide after 20 days that I don't want to own it and I sell it for proceeds of 12000.

Would this loss be disallowed due to the wash sale. I am a bit confused since the initial transaction was a gain but if the wash sale rule prevents you from claiming a loss on a sale of stock if you buy replacement stock within 30 days before or after the sale, it seems I would have bought the replacement stock immediately after the sale even if it was a gain so is this loss disallowed?

Similar example but I sell after 40 days for a loss

2. I own IBM at a cost basis of 10000 for 3 years. I sell it today for a 3000 long-term gain to lock in 2012 tax rates. I then immediately repurchase IBM at a 13000 cost basis. It goes down in prices so I decide after 40 days that I don't want to own it and I sell it for proceeds of 12000.

Since it is now 40 days after the repurchase would the loss now be allowed?

Thank you for your consideration.

Best,
DQ
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