Open Question
Capital Gains Question
Okay, I am ready to slap myself over here. I just succumbed to a tiny bit of
panic and sold a stock off only to turn around and buy it right back seconds
later. Did I just screw myself ? What about the wash-rule? Or does that only
apply to trying to lock in losses.
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If sold at a loss and repurchased as mentioned, it would be better to fill out a
paper return and reflect an entry on Form 1040 schedule D annotating 'wash sale'
/ 'no loss realized'. Otherwise, if information on your tax return filed does
not match the 1099B statements, you can expect the likelihood of receiving an
IRS letter 18 - 24 months after filing asking why there is a discrepency between
what is reported by the brokerage firm and what is reflected on your tax return
as filed.
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The loss ends up helping you anyway the next time you sell.
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the wash sale rule only applies if you sold for a loss. If you sold for a gain
and then bought it back, the wash sale doesn't apply. It happens to everybody
at some point.
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If you sold for a gain, no big deal. Taxes are just accounted for on the
individual transactions.
If you had a loss, you cannot accout for the loss on the sale, but rather must
add the loss into the basis for the new stock you bought.
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