Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
The wash sale rule applies to trades 30 days before or after the sale that triggered the loss. The loss on the 7/8/13 purchase would have been disallowed. Is the disallowed loss equal to the loss on those 100 shares?

No, they clearly disallowed the loss of 100 of the 1300 long-term shares, not the 100 shares purchased on 7/8/13 (which actually had a small gain).

But my understanding of the wash sales rule was that if the entire position is closed, there can be no wash sale involved (assuming no future purchase within 30 days, of course). Is that not accurate?

Ken

=============================
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.

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.

Bill
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.
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.