Rich Carreiro wrote:
- quote -

Rick had the right idea, except you only have to stay out of
the market for 31 days spanning December 31, and then only
for equities that produced wash sales that weren't cancelled
out already by profitable trades, to nullify the effects of
wash sales.

ed

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<uisdhj2w[at]yahoo.com> wrote:

- quote -

No; first, you can always buy a "similar" stock (e.g.
another company in the same industry) without triggering the
rule.

Second, the rule only prevents you from recognizing the loss
if you're still holding the second purchase at the end of
the year. If you sell during the year, the wash sale rule
is irrelevant.

Seth

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<uisdhj2w[at]yahoo.com> wrote:

- quote -

the wash sale rule does not prevent you from buying the
stock again. It just disallows the loss, with the
disallowed loss being added to the basis of the subsequently
purchased shares.

- quote -

I have more fundamental problems with the tax laws, but . . .

- quote -

does this help? http://www.fairmark.com/capgain/wash/wstrader.htm

note particularly "There's a way to eliminate the problem:
take a winter vacation from trading. Or at least from
trading the stocks you trade during most of the year." and
related discussion.

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uisdhj2w[at]yahoo.com writes:

- quote -

(1) Trade the way you normally do, except...
(2) Liquidate all your positions and then stay completely
out of trading for any 61-day period that brackets
31 December.
(3) Make sure you meet one of the estimated/withheld tax
safe harbors.

If you do both of those, you will (a) be able to realize any
losses you had in the calendar year, and (b) will be able to
ignore the wash sale rules when reporting transactions on
your Sched D.[*]
[*] Yes, technically you can't ignore them, but since if you
obey rules (2) and (3) you will pay exactly the same amount
of tax as if you reported transactions taking wash sales
into account, the IRS won't care since any penalties are
based on the amount of tax underpayment, which in this case
would be $0.

And by the way, it's *Congress's* wash sale rule, not the
IRS's.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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I have about 65K in Ameritrade.com and I usually trade 5-10
times a month. I have the basic trading skills such as
technical analysis, money management, discipline, patience,
non-emotional, cut loss quick, pre-define entry and exit
target, etc, but the most headache to me is IRS wash sale
rule.

The truth is there're always trades that lose money. No way
to avoid that. But the wash sale rule prevents me, within 60
days, from jumping back to the same or similar stock that I
had cut loss quickly.

Obviously, it is very difficult in trading if one has to
select different stock each time. Actually, to reduce risk
further, I mostly trade index related ETFs, not individual
stocks. That makes my selection of tradable stocks even
less. Since I am not a day trader, I am not qualified to
make mark-to-market selection when filing tax return nor do
I want to. I am not against paying taxes. Actually I do not
study any tax strategy books at all. All I want is, just to
be fair, that my capital loss can be offset by the capital
gain, in the same tax year. Without that, swing trading is
basically impossible. Current tax laws are unfair.

Please, trading experts, advise me if there's any way around
the wash sale rule to simplify the frequent/regular (but not
day-) trading. If not, then I have to either quit trading or
reluctantly, trading different security on each trade, or,
buying one and holding loss indefinitely until gain, which
is what Wall Street always want others, but not themselves,
to do. Thanks!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >