Barry Margolin <barmar[at]alum.mit.edu> wrote in
news:barmar-6219EB.21255413042008[at]newsgroups.comcast.net:

- quote -

Thanks, Barry!

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9A7F7128BB27Dikkezelf[at]130.81.64.196> ,
Han <nobody[at]nospam.not> wrote:

- quote -

I don't think you can.

- quote -

Right.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Han <nobody[at]nospam.not> wrote in news:Xns9A7BD6F7D116Fikkezelf[at]
130.81.64.196:

- quote -

shares, but not apparently after all calculations done properly. It is a
loss.

So could you please recapitulate what my situation is now?

These were mechanically 4 transfers from a single joint taxable account at
Fidelity into 2 separate individual Roth IRA accounts with the same SS#s as
on the joint account for 2007 and 2008 contributions for taxpayer and
spouse.

Joint account Magellan shares were bought over the years.
Sold on 1/22/08 with a ~$450 loss

Proceeds were transferred to Roth IRAs (spouse and me) for 2007 and 2008
contributions.
Purchased Magellan shares immediately using the Roth transferred proceeds.
(yeah, maybe not so smart, but I'm hoping the investment will pay off
eventually).

Questions:
I can or cannot report the loss for 2008 taxes?
The basis of these just purchased shares in the Roth accounts does not
really matter, right?

Thanks in advance!
--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

DF2 <replyvia[at]newsgroup_please.com> wrote in
news:e0mqv35jit7nrdh52nd1hg44s1ddpfadt3[at]4ax.com:

- quote -

estimated taxes on the gain, I think ...

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In misc.taxes.moderated, Han wrote:

- quote -

small, is not a wash sale.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <Xns9A7AA696EC87Eikkezelf[at]130.81.64.196> ,
Han <nobody[at]nospam.not> wrote:

- quote -

and buying in an IRA, it just prevents you from taking the loss off your
taxes for that year. If you sell at a gain, you INCREASE your tax for
that year, and the feds will take it happily.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"D. Stussy" <spam[at]bde-arc.ampr.org> wrote:
- quote -

Do the code or regulations include other related party transaction in
the definition of a wash sale? If it's there I couldn't find it. I
suppose it could be argued that the IRS position on wash sales and IRAs
is contrary to the statute and as a result unenforceable.

One perhaps interesting issue: section 1091 talks about "the
taxpayer." Since an IRA is not a tax paying entity, can it be argued
that the IRA is not either "the taxpayer" or "a taxpayer"?

Stu

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 9, 12:23*am, "D. Stussy" <s...[at]bde-arc.ampr.org> wrote:
- quote -

I like Phil's comment as well. However, Stussy's comment could be used
to support the position that a wash transaction was effectively the
same as a sale to the IRA which disqualified that retirment account.

Related party rules have long been interpreted as applying to wash
sale rules. I don't see the subject Rev Rul as breaking new ground.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Phil Marti" <prm20871[at]verizon.net> wrote in message
news:ZNQKj.16850$4Q1.11211[at]trnddc06...
- quote -

There's also the fact that selling TO the IRA is already a prohibited
transaction. I really don't like this because these (the person and his
IRA) are two separate entities for ownership purposes. In a TRUE wash sale,
it's the SAME entity that repurchases the security that was sold. I
certainly hope that this gets struck down soon, but Mr. Marti's response is
a reasonable compromise.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Barry Margolin <barmar[at]alum.mit.edu> wrote in
news:barmar-C9411C.15420308042008[at]newsgroups.comcast.net:

- quote -

and purchased into a Roth. For both 2007 and 2008. Since I didn't have
a loss, it is legal? <grin

--
Best regards
Han
email address is invalid

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Barry Margolin" wrote:

- quote -

Agreed, but applying the rule to the taxable sale/IRA purchase scenario
enriches the gov't while in a taxable/taxable scenario Uncle Sugar just
breaks even. In the latter, the loss is merely deferred, not eliminated.
Since the IRA can make no tax benefit of the loss, it disappears.

It seems to me that giving the IRA a basis (as in after-tax IRA basis) equal
to the disallowed loss would be more in the spirit and intent of the
statute.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <ftelb1$vok$2[at]snarked.org> ,
"D. Stussy" <spam[at]bde-arc.ampr.org> wrote:

- quote -

But the ruling is consistent with the spirit and intent of the wash sale
rule. The purpose of the rule is to prevent taxpayers from turning
paper losses into realized losses, and thus reducing their tax, with
little risk of missing an increase in the security's value. Selling
outside the IRA and then buying inside the IRA would be a pretty
effective way of doing this, although also it has the effect of turning
future capital gains into future ordinary income when you withdraw from
the IRA.

I could definitely see why they'd want to prohibit this in the case of
Roth IRAs. You'd get to realize the loss, but then repurchase the
security and never pay tax on the subsequent growth.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:jLqdnV40v5pJCGfanZ2dnUVZ_g6dnZ2d[at]comcast.com...
- quote -

I'd say that such could be a bad ruling. In general, a taxpayer and his IRA
are separate (but related) entities, especially for ownership purposes
(although one owns the other). The next thing we know, the IRS will issue a
ruling with regard to partnerships (or S-corps) held by the same owner where
one PS sells and another buys - thus disallowing the loss for the partner.
What a mess that could be - as Schedule K-1's only list dollar amounts, not
what was sold or when during the year.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"joetaxpayer" wrote:

- quote -

That's the "IRS" part of my response to OP.

Revenue Rulings are given a lot of weight, but they're not definitive. They
can still be challenged in court, and AFAIK this issue hasn't had its day in
court.

This question has been buzzing around for years, and I'm curious why it took
IRS so long to come out with an official position. It could be because
there were hotter issues to be addressed. It could be because they weren't
really comfortable with the position.

In any event, while it's unusual for IRS positions to be reversed by the
courts, it's hardly unheard of.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil Marti wrote:

- quote -

I thought we had a definitive answer back in December:

The IRS yesterday issued an advance copy of Rev. Rul. 2008-5, 2008-3
I.R.B. ___ (1/22/08), which applies the § 1091 wash sale rules where a
taxpayer sells stock or securities at a loss and then causes her IRA to
purchase substantially identical stock or securities within thirty days.
As a result, the loss on the sale is disallowed and the taxpayer's
basis in the IRA is not increased.

http://taxprof.typepad.com/taxprof_b....%202008-5.pdf
is a copy of the ruling.

Good FAQ item, BTW.
Joe
www.blog.joetaxpayer.com

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<kupchik[at]hotmail.com> wrote:

- quote -

No, according to the IRS. I don't know if it's been litigated, but I don't
think so.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

If you sell a stock in a taxable account at a loss and then buy it
back in an IRA account within 30 days, are you allowed to claim the
loss?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >