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I think I understand the reason for the IRS wash sale rule to prevent harvesting of tax losses. My question has to do with how does this rule apply to a gain. I recently saw what I felt was an short term opportunity to lower my basis for a stock that was already up 20%. So I sold and have a $4000 short term gain. Now two days later, the stock had dropped a little, so I have bought back my original position.

So will the wash sale rule protect me from gains on this sale?

thanks,....mike

Cross posted to Beginning Investors Board

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So will the wash sale rule protect me from gains on this sale?

Nope. It will be fully taxable.

--Peter
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The wash sale rule is to protect the IRS, not you :). Sorry, wash sale only applies on the loss, your $4k will be taxed at the full rate, hence the reason to generally avoid short term positions, although with a gain like that you can't be complaining too much.
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