wash sale

**afan** Sat Mar 12, 2005 1:05 am

wash sale
as a newbie in the market, this is the first year I have to include my gain in tax return. but i meet a problem of wash sale. last year i found a stock much attractive and bought it, then within 30 days i found a big weakness of it so my previous judgement of it changed. thus i sold it at loss and didn't touch it any more. I guess it is a wash sale, according to pub.550. the examples in 550 shows if I bought back the stock again, I can transfer the loss to the cost of the second purchase. Since I don't have the second purchase, can I find some way to deduct it in my tax return?

Thanks a lot!

**blast_investor** Sat Mar 12, 2005 12:08 pm

This is not wash sale. If you sold it and buy it back within 30 days, that is wash sale.

Since you did not buy it back, that is normal sale.

**jeep** Sat Mar 12, 2005 1:36 pm

I thought "Wash Sale" is illegal... Is it?

**afan** Sat Mar 12, 2005 5:09 pm

1st, 3x blast. the rule just confused me.
2nd, wash sale is legal operations. irs just does not want u save money unreasonably in this way:)

**blast_investor** Sat Mar 12, 2005 7:38 pm

Nothing illegal. It is just a way that government penalize short term traders in tax.

This rule really does not affect long term oriented value investors.

jeep wrote: I thought "Wash Sale" is illegal... Is it?

**jeep** Sat Mar 12, 2005 7:44 pm

Does it count as a wash sale across years? Say, I sell the stock in December and buy it back in January, with <30 days in between?

blast_investor wrote: Nothing illegal. It is just a way that government penalize short term traders in tax.

This rule really does not affect long term oriented value investors.

jeep wrote: I thought "Wash Sale" is illegal... Is it?

**blast_investor** Sat Mar 12, 2005 7:47 pm

Of course that is wash sale. If there is loss, you can not take tax loss.

However, if you had gain, you need to pay tax on the gain. There is no wash sale for gain. There is only wash sale for loss.

jeep wrote: Does it count as a wash sale across years? Say, I sell the stock in December and buy it back in January, with <30 days in between?

**shu_wd** Mon Mar 14, 2005 1:41 pm

I recommend a website
http://www.fairmark.com/capgain/wash/index.htm
where there are explaination and examples of wash sale.

Wash sale period not only include the 30 days after your sale but also the 30 days before your sale. In other words, if you buy the stock back within 30 days before your sale, that could be counted as wash sale as well.