club_cafe: wash sales
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club_cafe: wash sales >>>...can i sell some of > my shares of HRH (at a loss) and turnaround the next day and > buy some shares at the current price? or do i have to wait > 30 days? if so, why? thanks for any help. kim >>Hi Kim, >>Since Ira seems to be missing in action tonight <G> let me try to answer this. The answer is yes, you can buy it back the next day. But if you want to be able to take the loss on your taxes, the IRS says you must wait 31 days before you buy the stock back. Note that was 31, not 30. >>Lynn Ostrem, Minneapolis garbagecop@foxinternet.net Gee! I take an hour or two off to do some real work and look at the abuse I get! <vbg> Lynn has it almost precisely correct. What she left unstated was that if you buy the stock back before the 31st day you don't lose the loss forever. The loss is deferred until you sell the new shares of stock. You adjust your basis in the new shares by increasing it by the amount of the deferred loss. For more details see IRS Pub. 550, Investment Income and Expenses. www.irs.gov/pub/irs-pdf/p550/pdf Ira Smilovitz
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