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Posted by removeps-groups@yahoo.com on April 10, 2008, 11:07 am
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> Case 1:
> Xb ... [ ... Yb ... Xs ... ]
> Case 2:
> Xb ... [... Xs ... Yb ... ]
> Case 3:
> [... Ya ... Xb ... Xs ... ]
> Case 4:
> [... Xb ... Yb ... Xs ... ]
> Case 5:
> [... Xb ... Xs ... Yb ... ]
In addition to the other posts, were Xb and Xs and Yb the same number
of shares? If Xb and Xs were 10 shares, and Yb was 1 share, then the
disallowed loss in Xs is only for 1 share. If Yb was 10 or more,
then the disallowed loss is for all 10 shares (that is, none of the
loss is allowed).
> So, if I need to adjust Y's basis due to thewashsale, I also need to
> adjust Y's purchase date (cite from pub550:"If your loss was
> disallowed because of thewashsalerules, add the disallowed loss to
> the cost of the new stock or securities. 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 begins on the same day
> as the holding period of the stock or securities sold.") I basically
> want to confirm that Yb may adjust into the past (cases 1,2,4,5) and
> into the future (case 3). If it's not how this is done, then how is
> it?
>
> Q2: If I adjust (reduce) the basis of some stock due to awashsale,
> then it may happen that for that stock the adjusted basis is less than
> the proceeds and so, the loss has just moved to a different place. And
> this is asking to apply thewashsalerules again and again and again,
> until the loss is fully absorbed by the gains or there's no way to
> absorb it entirely (allwashsalerules exhausted) and it stays as a
> loss at which point some other rules may come in play (i.e. if it's a
> net loss there're limits on how much can be claimed). Did I get it
> right that after I've moved a loss to a different place (having
> applied thewashsalerules) I need to look again if that newly
> created loss may cause furtherwashsaleadjustments?
>
> I've read pub 550 and the following, but it's still unclear what the
> new holding period (the date of acquire) should be and if thewashsalerules
apply
recursively:http://fairmark.com/capgain/wash/ws101.htmhttp://www.smartmoney.com/tax/capital/index.cfm?story=washruleshttp://www.armencomp.com/wash-sales.htmlhttp://www.armencomp.com/wash-sale-example.html
>
> Thanks,
> Alex
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