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This question is about wash sales of stocks in the United States.

First transaction: On 06/27/2012 I purchase shares of a company for $1,000 and sell all of them for $2,000 at a profit of $1,000.

Second transaction: The next day, on 06/28/2012 I purchase shares of the same company for $4,000 and sell all of them that day for $2,000, a $2,000 loss.

In total, I lost $1,000.

My questions are as follows

  1. Since my first purchase and sale was a profit and I then repurchased the stock, is this a wash sale?
  2. TurboTax is telling me "The good news is you can keep a record of this $1,000 loss and when you sell the new shares you purchased, you can add it to your cost basis so your taxable gain will be less, or your loss even more." - the problem is I already sold the shares. So what do I do with this record of a $1,000 loss? Shouldn't it be added to this year's tax information?
  • did any of the answers satisfy you? – Pablitorun Apr 8 '13 at 16:07
  • Did you buy the same ('substantially identical') stock back again within 30 days? If not, I fail to see how this is a wash sale. The stock you have already sold cannot be considered to be replacement stock. – copper.hat May 29 '15 at 5:55
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According to Wikipedia this is still a wash sale:

In the USA wash sale rules are codified in "26 USC § 1091 - Loss from wash sales of stock or securities."

Under Section 1091, a wash sale occurs when a taxpayer sells or trades stock or securities at a loss, and within 30 days before or after the sale:

Buys substantially identical stock or securities.
Acquires substantially identical stock or securities in a fully taxable trade,
Acquires a contract or option to buy substantially identical stock or securities, or
Acquires substantially identical stock for your individual retirement account (IRA) or 
Roth IRA.
  • Vicky, thank you for your response. I'm fairly confident you're correct. Still seeking a sound answer to number two. – siouxfan45 Apr 4 '13 at 15:12
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You add the wash sale loss to your cost basis for the other transaction

so you would have two entries in your schedule d reporting

1.) Listing the $2000 loss as a wash

2.) The cost basis for your second transaction is thus $1000+$2000 = $3000 so when it was sold for $2000 you now have a reportable loss of $1000.

For more information see here.... http://www.ehow.com/how_5313540_calculate-wash-sale.html

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Strangely enough, you have a wash sale, but, for the fact that you sold the shares and then more than 30 days passed, you can take the loss.

I mistakenly used the phrase "and ended the year with no shared of the stock" elsewhere, and was corrected, as one can sell at a loss up to 12/31, and have until the end of January to create a wash condition.

In your case, the facts in June combined with you ending the year with no shares removes any doubt, a wash sale, but one that's fully closed out.

Note - while Vicky's answer is correct, it should go on to say that once the stock is not owned for 30 days, the wash sale loss is permitted.

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