Comments on: Reduce Your Capital Gains Tax Bill: Wash Rule

By: Jim

Jim — Wed, 11 Mar 2009 00:26:15 +0000

You will trigger the wash sale rule if you buy and sell, regardless of where, within the 31 day period.

By: brian flynn

brian flynn — Tue, 10 Mar 2009 23:59:08 +0000

Can someone out there tell me if you can buy the stock back within custodial or trust accounts without tripping the wash sale rule. That is, I sell WFC from my personal account and have my self-directed IRA or an educational trust established for my grand kids buy it back. Will I loose the tax deduction?

By: jim

jim — Sat, 25 Oct 2008 23:45:43 +0000

Kari: As long as you have proof of the purchase price, you can count it as a long term capital loss.

Mr. Jerry: I looked into that scenario and it turns out the rule applies for purchases 30 days before and after the sale of stock. So if you bought shares, you have to wait 30 days before you can sell and claim a loss.

By: mr.jerry

mr.jerry — Sat, 25 Oct 2008 21:59:45 +0000

Jim, are you still alive? I never saw a response to Kari’s JUN 2008 question. I have a wash rule question: Is it legal to first buy shares (i.e. s&p fund) in a mutual fund company, then a day later sell same amount of shares in a like mutual fund (i.e.s&p fund) that you own, in order to take a loss but not lose your position in the market? Sort of a reverse sell/buy strategy? Thanks.

By: Kari

Kari — Fri, 27 Jun 2008 16:51:48 +0000

I have a question for the gurus on this board. I held GE since 91 and felt that it wasn’t performing so I came out with a wash when I sold today. I actually traded it for an oil stock and am hoping to get some gains. Now, will I be able to count this as a loss since I’ve held since 91 and NO profits when I sold it? Thanks to all in advance!

By: MoneyNing

MoneyNing — Sun, 09 Dec 2007 22:11:05 +0000

CHM: I’ve never used the iShares tool but if it only suggests iShares ETFs, I would only use it as a guideline since there are many ETFs that aren’t iShares.

By: CHM

CHM — Sun, 09 Dec 2007 00:57:47 +0000

If you take it a step further, when you sell a mutual fund for the purposes of realizing a loss or avoiding a capital gains distribution, think about buying back into a like minded ETF.

By doing so, you avoid triggering wash sale rules, don’t miss any time in the markets and you will most probably be moving into a more cost efficient investment.

iShares has a tool on their site that allows you to find an ETF that corresponds to the mutual fund you just sold.

By: MoneyNing

MoneyNing — Fri, 07 Dec 2007 22:24:43 +0000

Actually, if you buy the stock back, the loss in the original sale is applied to the cost basis on the purchase the second time around so you end up claiming it after you sell the the second time.

Therefore it is “claimable”

By: Acero

Acero — Thu, 06 Dec 2007 14:16:05 +0000

Great Jim, thanks for the response. As always, pleasure reading your work.

By: jim

jim — Thu, 06 Dec 2007 01:48:56 +0000

Yes, you can deduct up to $3,000 of your capital losses from your income this year and carry the extra over (if you have any). It's superficially covered in Tax Topic 409, I'll expand on this tomorrow (thanks for the post idea!)

By: Acero

Acero — Thu, 06 Dec 2007 00:57:28 +0000

Not to distract from the more fun talk, If we have no realized capital gains this year (due simply to holding long) can we also use the rule to sell of some of our down stock to offset earned income for the year? I was actually just looking into this possibility so your topic is timely.

By: fivecentnickel.com

fivecentnickel.com — Thu, 06 Dec 2007 00:09:45 +0000

Lazy: Every single share is outstanding. Fantastic. And superb.

By: jim

jim — Wed, 05 Dec 2007 23:51:12 +0000

If you buy it within 30 days, you can’t write off the loss.

I think FCN is a pink sheet nowadays.

By: Lazy Man

Lazy Man — Wed, 05 Dec 2007 19:47:20 +0000

How much is a share of FiveCentNickel going for nowadays? How many shares are outstanding?

By: Bradley Harris

Bradley Harris — Wed, 05 Dec 2007 18:26:22 +0000

So what happens if you do buy FCN within 30 days and sell it later for profit..or loss?