Is this wash trade... is this legal

Discussion in 'Stocks' started by WhiteOut56, Nov 4, 2010.

  1. Account A
    Account B

    I place 1000 shares to buy MOC for PFE in account A
    I place 1000 shares to sell MOC for PFE in account B

    Both accounts are in my name. Is this legal?

    Don't concern yourself with WHY, just wondering is all respects is this legal?
     
  2. Bob111

    Bob111

    why not? from my statements -each account from brokerage firm is treated separately. they not referring to a trades on some other accounts,when calculate wash sale.
    on other hand..if IRS really want to screw you-they may use cross between accounts as an argument. i would ask them directly..but i suspect the answer will be-contact your accountant or tax lawyer..that's what they told me couple times,when i ask them a questions :p
     
  3. the1

    the1

    Technically, yes, this is a wash trade but I don't think (and I'm not a securities attorney) 2000 shares are going to catch the SEC's eye on a stock that trades 50M shares per day. If you did this on some micro stock that trades 200 shares a day then you may get a knock on your door. Just my thoughts.
     
  4. Yes, it's fine as long as your brokerage states otherwise. but you prolly don't want to ask them.
     
  5. What you described is a wash sale. (See below for IRS' definition)

    This is regardless where the equities are acquired. Because you can transfer your assets from one broker to another easy enough. Where you acquire/dispose your assets is not relevant.


    From:

    http://www.irs.gov/publications/p17/ch14.html#en_US_publink1000172359

     
  6. As long as you dont have a series 7, its ok.

    I already have a pretty good idea what you are trying to do and it wont work. Market makers will steal your shares the second they see what you are doing. You will not be able to sell to yourself and get the price higher. Market maker will hide his bids and asks and jump in front of you for a penny, then push that stock down forcing you to sell at a lower price.

    Believe me...they know your tricks.
     
  7. Bob111

    Bob111

    SEC have nothing to do with wash sales..if OP is planning something like peilthetraveler mentioned-then maybe :p
     
  8. GTS

    GTS

    That is not true - you must consider all accounts when determining if a wash sale occurred, you do not treat each account separately.
     
  9. the1

    the1

    What the OP is proposing is a Wash <b>Trade</b> not a wash sale and it's actually illegal, which means it falls under the jurisdiction of the SEC, not the IRS.

     
  10. nkhoi

    nkhoi

    not a first time I see this question. If your broker let you do it then go ahead test your theory if not let it go. Either way dont ask too much question.
     
    #10     Nov 6, 2010