On Apr 24, 6:42*pm, "Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -


Ahhh... I sorta figured it wouldn't be that easy. I didn't know
about the "wash sale" rules. Thanks to all who answered for helping
me begin my education into the labyrinth of IRS rules about
investing. I figured I would find some valuable insight here, and I
was right.

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In article <b7f0b116-f965-42a5-af10-27da36771120[at]a5g2000prg.googlegroups.com> ,
PeterL <po.ning[at]gmail.com> wrote:
- quote -


In this, the home of the brave, you can always buy them back, anytime,
anyplace, anywhere. Just understand the Wash sale rules affect your
ability to recognize losses.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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On Apr 24, 4:04*pm, MKR <mr...[at]michaelkingross.com> wrote:
- quote -


And if the stocks rise during the one month period when you cannot buy
them back due to wash sale rules?

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MKR wrote:

- quote -

So you should 'double up' then wait 31 days and sell the higher cost
shares at a loss. Of course you should only buy stocks that are going to
rise, but you knew that.
Point is, wash sale has the +/- window. You can double up first so you
don't have to be out of the stock for 30 day.

Joe

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"MKR" wrote:

- quote -

Maybe, maybe not. Before you do, read up on the "wash sale" rules in IRS
Publication 550. You cannot do what it appears you contemplate doing and
still recognize the loss on this year's return.

--
Phil Marti
Clarksburg, MD

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

I bought and sold some stock in 2008 on which I made about $11,000 in
short term capital gains. I also have some stocks that are not doing
as well - if I sold them today I would have about a $3,000 short term
capital loss.

My question is this: should I sell those losing stocks now and buy
them back?

I think they are going rise again, so my intention was to hang onto
them for a longer term. But it occurs to me that if I sell them now,
I would have $3,000 in losses to help offset some of my $11,000 gain.
And if I then turned around and used the proceeds from the sale to re-
buy the same stocks (let's say I could get them at the same price),
the only thing that would have changed would be the basis date for the
stocks (for determining when they went from short-term to long-term),
the basis value, and the fact that I can offset $3,000 of my gains.
And, of course, there's the $20 in transaction fees, but let's just
ignore this for the sake of this question. But everything else would
be equal.

So is there any reason why I shouldn't lock in this $3,000 loss now?
I realize that because the basis value of the stocks would be lower,
then when I sell them in the future (if they do rise) I will end up
with that $3,000 back as gains then - but I'm thinking that will be a
long-term gain, taxable at a lower rate, and the $3,000 loss this year
will offset my short-term gains at the higher rate. I'm thinking this
would trade $3,000 of my short-term gains for $3,000 of later long-
term gains.

Does this make sense?



========================================= MODERATOR'S COMMENT:
The Wash Sale rule says if you sell at a loss, and within +/- 30
days buy substantially identical securities, you have a Wash Sale. The
loss on a wash sale is disallowed, and the dissallowed loss is added to
the basis of the replacement shares. So your scheme does not work at all
unless you are willing to wait more than 30 days.

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