- quote -

thanks, that will make bookkeeping much easier!

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- quote -

Yes, that is the typical advice to anyone creating a lot of
wash sales throughout the year. Just close them all out
instead of worrying about wash sales. If the IRS objects
they may require you to demonstrate how this works, but I
doubt it. They have better things to do with their time and
I'm sure the auditors have already figured this out.

ed

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- quote -

yes, the day trades were bought and sold in the same day.

thanks for the reply. can that logic be extended to say
that if all positions are closed by the end of the year (and
no new purchases within the first 30 days of the new year)
that the wash sale rule can be ignored?

in my opinion, the IRS should make it clear that it's not
necessary to report wash sales when they don't affect the
amount of tax owed because it just makes the tax form more
complex for them to read (not to mention the extra work for
the filer).

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mike <m...[at]newssvr11-ext.news.prodigy.net> wrote:

- quote -

You are looking at the *closing date* of the prior gain
transaction. The thing that triggers a wash sale is the
initiating of an open position, so when that stock was
*bought* must be within 30 days of the sale of the possible
wash sale.

Since you called them *day trades* perhaps the purchase was
within the 30 days. If so, the reason you can ignore it
and you'll never find a rule saying so, is that it makes no
TAX difference whether you report it or not. IF the IRS
should challenge you there can be no penalty because there
is no tax difference. Because of that you need not look at
closed posititions for the triggers to wash sales.

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I posted this on misc.invest.stocks and it was suggested
that i ask here:

if i have a loss on a daytrade but had a gain on another
daytrade of the same stock less than 30 days prior do i
"wash" the loss into the cost of the earlier trade? seems
stupid to wash a loss into a position that's already closed
but the way the rule reads it looks like that's how it's
supposed to be reported.

to make this more clear, here's what happened:

2/22/06 gain of $418
3/06/06 loss of $172

i believe the proper way to report is to add $172 to cost
for 2/22/06 such that gain is only $246 and make 3/06/06 a
wash sale.

this was one of the replies:

- quote -

from: http://www.fool.com/taxes/2000/taxes001006.htm

** the problem i have is that the IRS doesn't indicate
anything similar to the above quote in publication 550
(where it defines wash sales) so are traders required to
report wash sales within the year (even if they have no
carry-over) or can they just be reported as losses when they
occur. obviously it would be much simpler to do the latter
and the tax liability would be the same.

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