Now with the new wash sale rules you can't win You buy and sell and take a loss... and then buy it back when it falls with in 30 days and take a profit .. you can't clam the loss against the gain .... The IRS says no! you can not claim the loss how is that going to work? I do must of my trading this way buying and selling the same stock in the same day.. it's over! I'm sure this will apply to what ever you trade The IRS got us ...
Yet ANOTHER EliteThickhead... IRS Pub 550, pg 59 If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding pe- riod of the stock or securities sold. Example 1. You buy 100 shares of X stock for $1,000. You sell these shares for $750 and within 30 days from the sale you buy 100 shares of the same stock for $800. Because you bought substantially identical stock, you cannot deduct your loss of $250 on the sale. However, you add the disallowed loss of $250 to the cost of the new stock, $800, to obtain your basis in the new stock, which is $1,050.
Tax costs for poorly timed stock transactions By Kay Bell ⢠Bankrate.com Taxes » Tax Credits » Tax Costs For Poorly Timed Stock Transactions Your portfolio took a beating, but you were able to use that to your tax advantage by selling some losers. Now one of your former stocks has turned around and you want it back. Don't be in too big of a hurry to call your broker. If you repurchase the stock too soon, you'll violate the wash sale rule. This regulation prohibits a shareholder from selling a holding at a loss, using that loss for a tax break and then turning right around and buying the same or similar stock. It's designed to prevent the deduction of what the IRS calls "noneconomic losses." Essentially, in the eyes of the Internal Revenue Service you never really sold the stock. Your repurchase indicates to the tax agency that you believe in the investment itself but the whole purpose behind the transaction was to generate a tax loss. "You just sold it to book that tax loss, and the Internal Revenue Service is not going to let you do that," says Jim Van Grevenhof, senior tax analyst from the Tax & Accounting business of Thomson Reuters. Most investors encounter the regulation when they reacquire a stock soon after selling, but it works the other way, too. Specifically, the law says you may not take a tax loss on a security sale if you have obtained the same or a substantially identical security 30 days before or 30 days after a sale. So don't try to get around the rule by buying more of a stock just before you dump the poorly performing shares you already own. No loss now, but later When a stock transaction violates wash sale guidelines, the IRS will not let you take the tax break immediately. However, all is not lost. For tax purposes, the deduction of your loss is postponed to a later date. That is, the disallowed loss is added to the cost of the new shares you bought. This gives you the tax basis for the holdings, which you'll use when you sell the reacquired securities. For example, Joe bought 100 shares of Stock A for $1,000 and sold them for $750, producing a $250 loss. Fifteen days later he bought 100 new shares of Stock A for $800. Because Joe bought identical stock, he can't immediately take the loss. But he can add the disallowed $250 to the $800 price of his new shares, producing a basis of $1,050 for the new shares. When Joe sells his reacquired Stock A shares, the adjusted basis will, depending on the sales price, produce a bigger loss to claim or reduce any taxable gains. And don't try to skirt the rule by buying a call option on the stock. "Say I bought a stock at $30, it went down to $20 and I want to sell it and claim the $10 loss. Then a day or two later, I buy a $20 call on the stock," says Van Grevenhof as way of illustration. "What I hope is that the stock will go up. That's the same thing as buying actual stock and it violates the wash sale rules." What exactly is identical? The wash sale timing considerations are pretty straightforward. That's not necessarily the case for the rule's other key component: the nature of the sold and repurchased stock. Read more: http://www.bankrate.com/finance/mon...timed-stock-transactions-1.aspx#ixzz2NCFxQqcj Follow us: @Bankrate on Twitter | Bankrate on Facebook
http://answers.yahoo.com/question/index?qid=20110207161832AAZetZg is there something new in it since 1954? as been explained above-you add disallowed loss to basis. 10-20K executions per year and it's so insignificant to me that it's imo not worth to even elect M2M. i'm missing something?
I been reading this wash stuff like it was new.. the news seem new I noticed my new 1099's from Scottrade have every wash trade I ever done now on the new form they never did that before I just hope I don't get killed when I get my taxes done next week!
the 'new' 1099B was same as it was year ago. they(IRS) changed format 2 years ago. where have your been? there is nothing new in it. same s**,just more detailed. that's about it. if you try to do your taxes by yourself using any retail tax soft-you will be much more confident and knowledgeable about it. you have to know your taxes. don't know about you,but this- is not in my vocabulary. i know how much i paid and how much i might own. UP to +/-100$. and i'm just a regular guy(not even born in US),not CPA or something. since IRS made those changes-it got a bit more complicated,but still manageable. even for average joe-the trader btw- it's always good to know the numbers on those forms,cause your broker might be wrong sometimes. i've found few transactions,reported as short term,while they are over 1 year long and should be taxed differently. saved me about 500$ right on spot.
I'm sure more reading would go a long way on the subject of taxes with short term stock trading. As I currently understand it , taxes seem high and it confuses the hell out of me. When I used to dabble in short term stocks I would just put my P/L and staple my trades to the tax return , if they had a problem, then I figured they can go line by line and correct it. Probably not advisable though lol Futures are pretty straight forward. At the end of the year you report your Profit or Loss and that is it. One number is all I need to know.
or quit trading all together. even more simple! like those guys from india or whatever.. they have nothing . and nothing to worry about!