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Subject:  Re: Wash sale or stupid broker? Date:  3/16/2014  2:42 PM
Author:  KenAtPcs Number:  120473 of 132878

Your understanding is correct. But it may be that their computer, because it's looking at the block of 1400 sold as two sales, one short-term for 100 shares, and one long-term for 1300 shares, in focusing on the long-term 1300 shares, looked forward and backward 30 days and found an offsetting purchase, and so went into "wash sale" mode.

I suspect you are right, this is how the computer arrived at it.

Even if they were right, you'd load the disallowed loss into the basis of the remaining 100 shares, which are short-term. Did they do that? If so, you're actually better off reducing a short-term gain.

Well, a couple of things. First of all, I was wrong to characterize the 1300 shares as a long-term holding -- it was actually a month short of long-term. So the entire transaction is characterized as short-term.

Oddly, they split the sale into two chunks of 1000 and 400 shares (perhaps that's the way the trade was filled; I haven't looked). But I hadn't noticed -- you are exactly correct: The total basis reported for the two transactions is $120 more than real, so clearly they added the "disallowed" amount to the basis. Thus, even though the reporting isn't 100% accurate, there is no tax consequence in reporting it the strange way that they have.

Sorry for wasting people's time with what has turned out to be completely inconsequential, but I did learn some things.

Thanks, Bill.

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