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I would appreciate help on my own little scenario (all transactions of the same stock). Okay, here's the background. I bought 100 shares of a stock @ $14.00/share on 5 Jan 2000, another 100 @ $2.00/share on 15 Nov 2000, and 500 @ $1.00/share on 13 Dec 2000. I sold 100 shares @ 1.00 on 29 Dec 2000. Now, here's the question. I know the "Wash Rule" applies to a stock purchase and/or sell within a 3o day period. Even though I bought and sold the same stock in December, can I still take a capital loss using the FIFO method whereby I count my first purchase of 100 shares of the stock on 5 Jan against my first sell of 100 shares of the stock on 29 Dec?

Since you're asking this question this way, we'll assume that you did not identify the stock sold on 12/29/2000. Thus, you sold the 1/5/2000 shares, and the basis was $1400. You have a $1300 loss on the sale.

However, you purchased 500 shares on 12/13/2000, so the 12/29/2000 sale is a wash sale, and you cannot recognize the $1300 loss. Rather, you have to add the loss to the basis of 100 of the replacement shares.

Phil Marti
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