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No. of Recommendations: 1
It is obvious that I do not understand the "wash-sale" and "replacement shares" of trades which, in the past, I did frequently building up a considerable long term loss and deferred loss.

Also, due to reverse splits interesting things happened involving options with this stock which recently expired.

Specifically: I now have 10 shares of a stock (DUST) which my broker is carrying at:
Purchased: 6/4/2019 Price paid=421.51 Long
How can I sell this stock to generate a long term loss without triggering more "wash sales and or replacement shares"?

I am 81 years old and am now ready to throw in the towel as it seems no matter what I do, I always have lots of short term gains (to pay taxes on), and all my long term losses become "deferred"; losses which I can only take at the rate of $1500 per year. If I throw in the towel and live to 250, I might be able to use them all up.

I have also considered selling covered calls on stocks more than a year out. If they are called out at expiration, any gain would be long term since they had been held more than a year. Is that correct? If they are NOT called out, I could either sell the same covered call again, or sell the shares at whatever they were priced at expiration and generate either a long term gain or loss. Is that correct?

I am having memory problems and the rules are so confusing I cannot get a grasp on them.

I enjoy this board very much as well as a few others and wish you all well.

I thank you for any advice or help you can give an "old guy" that is starting to lose it all. The entire port is only 200-250K but retirement income, housing, and health care are not a problem for me.

Thanks,
dcy42001
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No. of Recommendations: 8
How can I sell this stock to generate a long term loss without triggering more "wash sales and or replacement shares"?

The universal solution is to sell all of your shares and options for this company, then wait at least 30 days before buying again.

The more complicated solution is to look back to your last purchase of shares or options in the company. Wait at least 30 days from that date, then sell the desired number of shares. Now, wait at least 30 more days before buying any more shares or options.

—Peter
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No. of Recommendations: 8
I am 81 years old and am now ready to throw in the towel as it seems no matter what I do, I always have lots of short term gains (to pay taxes on), and all my long term losses become "deferred"; losses which I can only take at the rate of $1500 per year.

Assuming you are talking about 'carry forward' losses when you say 'deferred' losses, you can use those to offset both short term and long term capital gains, in addition to offsetting $3,000 per year in ordinary income (unless MFS, which allows only $1500 instead of $3000). If you are not offsetting your short term capital gains by using up the carry forward losses, you're not doing your taxes correctly.

Here's a tax topic that will give you some additional references: https://www.irs.gov/taxtopics/tc409

AJ
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