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Suppose the following are the transactions of a stock/etf:
date ....price .... shares
6/1 .....$10...... buy 100
7/5 ..... $9...... buy 200
7/20 ....$6...... buy 250
8/11.... $5 ......sell all 550 shares
Would the 250 shares be counted as wash sales or not? (I understand that if you don't sell ALL shares, then there would be wash sale because you bought replacement shares on 7/20 within 30 days of the sale. But what if you sell ALL shares? then the 250 would not be "replacement shares", correct?)
the way i understand it and i could be wrong is if you sell all shares you lose the loss totally . if you don't sell all shares then the loss is not allowed and is instead passed down to the other shares and raises your cost basis for a later date .
You would have to rebuy shares in the same name before a wash sale would apply
But the rule says it's a wash if you buy replacement shares within 30 days before or after the sale, so the 250 shares are less than 30 days "before" the sale. ? (How would the "before" apply if you have to rebuy later?)
But the rule says it's a wash if you buy replacement shares within 30 days before or after the sale, so the 250 shares are less than 30 days "before" the sale. ? (How would the "before" apply if you have to rebuy later?)
Before would only apply if you hadn’t sold the entire position, selling the entire position only leaves the buying back after the fact
But the rule says it's a wash if you buy replacement shares within 30 days before or after the sale, so the 250 shares are less than 30 days "before" the sale. ? (How would the "before" apply if you have to rebuy later?)
but you didn't buy replacement shares since you sold out the entire position.
In your scenario, if you buy shares in that name within 30 days after 8/11, then the wash sale rules would kick in.
Thanks, so that confirms how I understood it. So one way to avoid wash sale complication is to just sell all shares (and don't buy back until 30+ days later).
P.S. However, if I had bought the same security in a Roth account within 30 days before the sale, then it's still a wash! (not sure if the IRS would find out, though)
Last edited by snowmountains; 10-19-2018 at 01:50 PM..
P.S. However, if I had bought the same security in a Roth account within 30 days before the sale, then it's still a wash! (not sure if the IRS would find out, though)
there is no wash sale if you sell all your positions. A wash sale applies only if you retain some part of the security through a purchase immediately prior to or after the sale (60 day window). If the security no longer appears in your portfolio there is no context of a wash sale since there is no security to apply the wash sale to. In your example there is absolutely no wash sale because you sold everything you acquired in the time window and did not retain anything so you're entitle to claim 100% of the losses.
there is no wash sale if you sell all your positions. A wash sale applies only if you retain some part of the security through a purchase immediately prior to or after the sale (60 day window). If the security no longer appears in your portfolio there is no context of a wash sale since there is no security to apply the wash sale to. In your example there is absolutely no wash sale because you sold everything you acquired in the time window and did not retain anything so you're entitle to claim 100% of the losses.
This is incorrect. The wash sale rule says if you sell at a loss and buy back within 30 days those shares are subject to the 'wash sale rule'. Selling all of the position doesn't exempt the next purchase. IF YOU SELL AT A LOSS, any amount of shares, and then re-purchase that or a similar security that purchase will be subject to the wash sale rules. 1 share, 10 shares, all 550 shares. If there is a sell at a loss those shares "loss' will adjust the cost basis of the re-purchased lot.
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