In article
<5944d49c-4751-4bb6-bdc5-b04f69abbb24[at]n14g2000pri.googlegroups.com> ,
"Alexei A. Frounze" <alexfrunews[at]gmail.com> wrote:

- quote -

Yes. Once you make the adjustment, you use the adjusted basis and
purchase date when figuring out whether any future sales are wash sales.

You might want to take a look at http://www.fairmark.com/capgain/wash.
It has lots of information on the wash sale rule, including links to
software that can help if you have lots of trades that need to be
reconciled.

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

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"Seth" wrote:

- quote -

You're so intent on making this harder than it is that you're not paying
attention. If after a sale you hold no shares of the stock just sold, the
wash sale rule cannot apply unless...

- quote -

No, since I already dealt with the before part in number 1. If you buy
something and within 30 days sell it for a loss but hold no remaining shares
of the stock (my # 1), the wash sale rule doesn't apply, unless #2 applies.

--
Phil Marti
Clarksburg, MD

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In article <QwmLj.8892$_I1.3824[at]trnddc02> ,
Phil Marti <prm20871[at]verizon.net> wrote:

- quote -

Huh? Selling half a position has the same rule as selling all of it.

- quote -

Shouldn't that be "within 30 days before or after" and remove rule 1?

- quote -

Seth

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On Apr 9, 6:08 am, "Alexei A. Frounze" <alexfrun...[at]gmail.com> wrote:

- quote -

In addition to the other posts, were Xb and Xs and Yb the same number
of shares? If Xb and Xs were 10 shares, and Yb was 1 share, then the
disallowed loss in Xs is only for 1 share. If Yb was 10 or more,
then the disallowed loss is for all 10 shares (that is, none of the
loss is allowed).


- quote -

========================================= MODERATOR'S COMMENT:
Please delete unnecessary text from the prior message when posting.

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<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Alexei A. Frounze" wrote:

- quote -

The history of how your basis was established is irrelevant. Any time you
sell for a loss you have to consider the wash sale rule if:

1. You still have a holding in the security after the sale; or

2. You purchase the same security within 30 days after the sale.

Note that "consider" doesn't mean that the rule automatically applies to #1.

--
Phil Marti
Clarksburg, MD

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On Apr 9, 4:51 pm, Barry Margolin <bar...[at]alum.mit.edu> wrote:
- quote -

Sorry, you're right, I increase the basis, of course.

- quote -

So, if the shares whose basis was adjusted due to the wash sale rules
were sold, then what? If selling them with this adjusted basis results
in a loss (but wouldn't if I had not made the adjustment), then I need
to check whether or not that results in another wash sale? Right?

Alex

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In article
<284ca102-8061-46d6-9c19-6700fcee889c[at]1g2000prg.googlegroups.com> ,
"Alexei A. Frounze" <alexfrunews[at]gmail.com> wrote:

- quote -

You never reduce the basis. The disallowed loss is added to the basis
of the replacement shares, so you increase the basis.

- quote -

If the basis is less than the proceeds, you have a GAIN, not a loss.
What I think you means to say is that it may happen that the increased
basis is greater than the proceeds.

- quote -

I'm not really sure what you're getting at. You have to make another
sale to have another wash sale.

- quote -

--
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. > << ------------------------------------------------------- >

Q1: It's about the holding period of the replacement security.
There're several situations possible. Let's denote the purchase of
shares (that will later be sold at a loss) as Xb. Let's denote the
sale at loss as Xs and the other shares that were purchased within the
wash sale period as Yb. Let's denote the wash sale period beginning
and ending by [ and ]. Let's depict this on a timeline (left to right:
past to future):
Case 1:
Xb ... [ ... Yb ... Xs ... ]
Case 2:
Xb ... [... Xs ... Yb ... ]
Case 3:
[... Ya ... Xb ... Xs ... ]
Case 4:
[... Xb ... Yb ... Xs ... ]
Case 5:
[... Xb ... Xs ... Yb ... ]
So, if I need to adjust Y's basis due to the wash sale, I also need to
adjust Y's purchase date (cite from pub550:"If your loss was
disallowed because of the wash sale rules, add the disallowed loss to
the cost of the new stock or securities. The result is your basis in
the new stock or securities. This adjustment postpones the loss
deduction until the disposition of the new stock or securities. Your
holding period for the new stock or securities begins on the same day
as the holding period of the stock or securities sold.") I basically
want to confirm that Yb may adjust into the past (cases 1,2,4,5) and
into the future (case 3). If it's not how this is done, then how is
it?

Q2: If I adjust (reduce) the basis of some stock due to a wash sale,
then it may happen that for that stock the adjusted basis is less than
the proceeds and so, the loss has just moved to a different place. And
this is asking to apply the wash sale rules again and again and again,
until the loss is fully absorbed by the gains or there's no way to
absorb it entirely (all wash sale rules exhausted) and it stays as a
loss at which point some other rules may come in play (i.e. if it's a
net loss there're limits on how much can be claimed). Did I get it
right that after I've moved a loss to a different place (having
applied the wash sale rules) I need to look again if that newly
created loss may cause further wash sale adjustments?

I've read pub 550 and the following, but it's still unclear what the
new holding period (the date of acquire) should be and if the wash
sale rules apply recursively:
http://fairmark.com/capgain/wash/ws101.htm
http://www.smartmoney.com/tax/capita...tory=washrules
http://www.armencomp.com/wash-sales.html
http://www.armencomp.com/wash-sale-example.html

Thanks,
Alex

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<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >