Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Thanks for the replies!

Perhaps I am just mistaken, as I have never had this situation before. Perhaps a wash sale does not exist as long as you end in a net gain for the year in the same stock.

I will make up an example to better illustrate my question:

Jan 5 buy 100 XYZ corp at 50. = $5,000
Jan 10 buy 1000 XYZ Corp at 20. =$20,000
Jan 15 sell 1000 XYZ Corp at 40. = $40,000

Broker records that the shares sold were the 100 bought at 50 = loss of $1,000
and 900 bought at 20 = gain of $18,000

Later in same year there were additional buys and gains in the same stock.

On the tax return can one then just enter the actual purchase prices and dates of the original shares and show the loss as it is shown that there was a net gain for the year?

Technically the loss from the first 100 sold is not "counted" as it is a wash sale but is added to the cost basis of the remaining shares held. In actuality though you are actually just using this loss to offset the gains you made later in the same stock in the same year.

Am I correct in this?

The reason for the question is this. The market in the last two months has been volatile. At the start of the election problems for example, it looked like a good time to exit some stocks as they would go down short term and then buy back after the final resolution to the election. In doing so one may show some losses that will be replaced by gains in the same year.

Thanks for any help.

Richard
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.