Wash Sale Rule - Simply Explained. To get a red
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Posted On: 10/11/2018 7:33:25 PM
Wash Sale Rule - Simply Explained.
To get a reduction in your tax bill by claiming a short term or long term loss, you must not incur a "wash sale".
To not incur a "wash sale":
You must not buy any of the "substantially identical" stock at any price (ie OTTV/OTTVD) within 30 days of selling some for a loss [which is why some savvy traders starting selling on October 4 - they will be eligible to buy cheaper than the ones they sold from November 4].
You must not have bought any at a cheaper price than the ones you want to sell for a loss within the preceding 30 days.
I'm not a financial advisor but I believe my interpretation is correct as when I have traded pre-r/s and post r/s successfully in this manner on other stocks, the anticipated deliberate losses and tax reductions have been applied by E*Trade as I was expecting, reflected in my F-1088 and accepted by my CPA.
To get a reduction in your tax bill by claiming a short term or long term loss, you must not incur a "wash sale".
To not incur a "wash sale":
You must not buy any of the "substantially identical" stock at any price (ie OTTV/OTTVD) within 30 days of selling some for a loss [which is why some savvy traders starting selling on October 4 - they will be eligible to buy cheaper than the ones they sold from November 4].
You must not have bought any at a cheaper price than the ones you want to sell for a loss within the preceding 30 days.
I'm not a financial advisor but I believe my interpretation is correct as when I have traded pre-r/s and post r/s successfully in this manner on other stocks, the anticipated deliberate losses and tax reductions have been applied by E*Trade as I was expecting, reflected in my F-1088 and accepted by my CPA.
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"Per Ardua Ad Astra" - "Through Adversity To The Stars"
A very apposite motto for those who trade successfully in the OTC market..
All posts are my opinion - trade at your own risk.
A very apposite motto for those who trade successfully in the OTC market..
All posts are my opinion - trade at your own risk.