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Buying back before the 30 day rule on a wash sale stock
Posted on 8/26/21 at 7:55 am
Posted on 8/26/21 at 7:55 am
Does anyone have any good documentation? Just trying to understand where they come up with the calculations? I know its frowned up and there are penalties but need to why if you repurchase stock before 30 days @31 then it shows purchased @35 the next day?
4
Posted on 8/26/21 at 9:01 am to FLObserver
Let's say you bought in 2019 @26, then sold in 2021 at @22, then repurchased at @24 10 days later.
The loss of $4 is deferred.
The mechanics of that deferral call for your basis in the new share, you bought @24, to have the deferred loss added to it, so now your basis in that new share is @28.
The loss of $4 is deferred.
The mechanics of that deferral call for your basis in the new share, you bought @24, to have the deferred loss added to it, so now your basis in that new share is @28.
This post was edited on 8/26/21 at 9:02 am
Posted on 8/26/21 at 10:21 am to FLObserver
quote:but the penalty is just you can't use that part of tax write off correct?
there are penalties
Posted on 8/26/21 at 10:27 am to FLObserver
I just wouldn’t do it. You lose the ability to claim the loss on taxes. Not enough people talk about this frankly. You can get in deep water real quick not paying attention to that
Posted on 8/26/21 at 11:42 am to Brettesaurus Rex
quote:
just wouldn’t do it. You lose the ability to claim the loss on taxes. Not enough people talk about this frankly. You can get in deep water real quick not paying attention to that
Started trading past couple years, was in a falling stock, got out to let it continue dropping and then bought back in a few days later. Had no idea about this rule and cost me a ton
Posted on 8/26/21 at 11:45 am to FLObserver
Your brokerage calculates it for you
I end up with 50 pages of trades for the year but it ends up with a nice little number on the front page
Idk man I learned my lesson if you can make money make money and met the government get theirs later because the house will take it all otherwise
I end up with 50 pages of trades for the year but it ends up with a nice little number on the front page
Idk man I learned my lesson if you can make money make money and met the government get theirs later because the house will take it all otherwise
Posted on 8/26/21 at 11:55 am to Mizzoufan26
quote:
Started trading past couple years, was in a falling stock, got out to let it continue dropping and then bought back in a few days later. Had no idea about this rule and cost me a ton
This is why brought it up. Seems like if your lose is a few cents then you may be ok but if its dollars and a bunch of shares then this could be bad. Just wanted some clarification and others out there know about this.
Thanks LSUFanHouston for the explanation.
This post was edited on 8/26/21 at 11:58 am
Posted on 8/27/21 at 10:15 am to Mizzoufan26
Were you trading out of an IRA or regular trading account? I think wash loss rules are much different depending on the account type.
Posted on 8/27/21 at 10:19 am to Tiger580307019
regular trading account
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