1. Bought 500 shares of XYZ on May 1
2. Bought 500 more shares of XYZ on May 4
3. Bought 500 more of XYZ on May 5
At each interval, the stock price was lower. Should the stock price on XYZ plummet on May 6, and I were to sell the entire position (1500 shares) on that same day, would wash sales rules apply? How could I avoid?
2007-06-05 06:53:00 · 2 answers · asked by Magic 2 in Business & Finance ➔ Taxes ➔ United States
To avoid the wash sale rules, you could not buy XYZ stock again for 30 days.
2007-06-05 07:00:16 · answer #1 · answered by extra_37 4 · 1⤊ 0⤋
extra_37 is correct. A wash sale only exists if you buy the same stock within the specified timeframe after selling at a loss - then you can't deduct the loss from your current taxes, it rolls into the basis of the newly-purchased stock.
As long as you don't repurchase XYZ stock, there is no wash sale.
2007-06-05 07:09:20 · answer #2 · answered by Judy 7 · 3⤊ 0⤋