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I sold some RSUs at a loss of about ~5K on 12/27/2018 but am scheduled to receive the same stock via ESPP on 12/29. Will this ESPP transaction disqualify the ~5k capital loss on RSUs as Wash sale?

If yes, is there anything I can still do to use this ~5k loss to reduce my tax liability this year? Can I realize the loss if I sell the ESPP shares as well before the year ends?

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Yes, the wash loss is used to adjust the basis of an equivalent number of replacement shares. If you also sell the ESPP shares before the end of the year (and don’t acquire any other replacement shares in January), then you can take the loss this year.

Are you sure you will be credited with the ESPP shares in time to sell them before the end of the year?

  • I am hoping the ESPP will get credited by 12/31 so that I can sell! Could you please clarify what you mean by "equivalent number of replacement shares". The number of stocks I sold on 12/27 to incur the loss is way higher than the number of stocks I will receive via ESPP. In that case, will Wash Sale be applied to a partial amount of loss? And the rest of the loss could still be used as Capital loss in tax calculations? – shreyj Dec 31 '18 at 5:09
  • Yes, the loss per share of the sold shares is what is applied to the replacement shares, so most of your loss will be effective this year, even if you don’t sell the replacement shares. – prl Dec 31 '18 at 7:14

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