Wash Sale Question, Example

Discussion in 'Professional Trading' started by VoodooMMI, Dec 15, 2009.

  1. On December 1st, 2009 I bought 1,000 shares of WXYZ stock at $10 per share. Bad news came out on the stock and on December 5th, 2009 I sold 1,000 shares of WXYZ stock at $9 per share. In my account for calendar year 2009 I have significant realized capital gains as the result of stock sales. Assuming that I make no more transactions in WXYZ, can I reduce my 2009 capital gains by this $1,000 loss OR since I sold the stock within 30 days of buying it, would this be considered a wash sale? If this is a wash sale and I have no other transactions in WXYZ, when would I be able to deduct this loss? I looked at IRS Publication 550, page 55, but I didn't see this situation covered there.
  2. It's a wash sale since you sold it in less than 30 days.

    What I'd like to know is if you elect mark-to-market accounting when you do your 2009 tax return can you then consider it a loss against your gains for the year 2010? I read something somewhere regarding this issue but still not very clear.
  3. CET


    The wash sale applies if you rebuy within 30 days after selling at a loss, not selling it within 30 days after buying. So yes you can deduct the loss.
  4. rwk


    Holding period does not affect wash sale rules, only whether you re-purchase within 30 days. Note that wash sales only affect your taxes if you own/re-purchase in the new year.

    Regarding electing MTM accounting, the deadline for 2009 was April 15th. You can form an entity (e.g. LLC), but MTM accounting would only apply to trades made by the entity.
  5. My apologies in advance but you don't know what you're talking about. No wash sale in this case so long as there were no other WXYZ transactions within + or - 30 days. The holding period has nothing to do with it.
  6. How much is it now Mister? ( I looked for it on yahooo finacne and couldn't find it )
  7. morgen


    If you repurchase the same stock within 30 days , the wash sale will occur.