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Hello all,
This is a bit long, so thanks to all who can offer an opinion.

I believe I understand how this should be calculated but some confirmation would be nice.

11/1/2000, I purchase 200 shares of XYZ @ 20 per share.
11/15/2000, I sell 200 shares of XYZ @ 15 per share.
12/1/2000, I purchase 150 shares of XYZ @ 16 per share. As of 1/31/2001, I still hold the 150 shares.

My broker commission is $20 per transaction.

So if not for my repurchase on 12/1 I would have the following:

The cost basis of my 200 shares purchases on 11/1 is $4020, 200 times 20 plus the $20 commission.

The processeds from 11/15 would be $2980, 200 times 15 minus the $20 commision.

My net loss would be $1040.

Now let's introduce wash sale rule. Since I repurchased some of the stock on 12/1 I have to account for the wash sale.

Since on 12/1 I repurchased 75% of the shares that I sold on 11/15, I can only take 25% of the capital loss. So the amount of my capital loss would be %25 of 1040, or $260.

On my schedule D for the year 2000, I would only reference the following:

50 shares of XYZ purchased with a cost basis of $1005 (%25 of 4020), 50 shares of XYZ sold with proceeds of $745 (25% of 2980), giving a net loss of $260.

The part of the loss that I did not take due to the wash sale was $780. So if I sell my remaining shares of XYZ in 2001, my cost basis of those shares would be $2420 (150 times 16 plus the $20 commision) plus the $780 that I could not take from the year 2000, for a cost basis of $3200 for these 150 shares.

I think I have this right, but would appreciate any comments.



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I think I have this right, but would appreciate any comments

Everything's right (I didn't check your math, but the method's right) except for how you report on the year 2000 Schedule D. You have to report the entire sale, with the entire loss. Then on the next line you show the wash sale adjustment. See the Schedule D instructions.

TMF ExRO
Phil Marti
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Super,

I thought I would have to show the whole sale somehow, but wasn't sure how it should be presented.

I love it when I understand things.

Regards.
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