Wash sale question

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DCA2021
Posts: 26
Joined: Sat May 08, 2021 2:28 pm

Wash sale question

Post by DCA2021 »

Simple question after discussion with friend…


Scenario 1: I buy 10 shares of FB today at $100 sell all 10 shares at $90 in 5 days for a loss of $100. Is this a wash sale?

Scenario 2: same as scenario 1 but I sell 5 shares instead of all 10 for a total loss of $50. Is this a wash sale?
Silk McCue
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Joined: Thu Feb 25, 2016 6:11 pm

Re: Wash sale question

Post by Silk McCue »

Neither scenario is a Wash Sale. They are simply short term losses.

Here’s a Wiki on Tax Loss Harvesting that discusses Wash Sale scenarios.

https://www.bogleheads.org/wiki/Tax_loss_harvesting

Cheers
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arcticpineapplecorp.
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Re: Wash sale question

Post by arcticpineapplecorp. »

do you have any replacement shares for either the 10 you sold in scenario 1 or the 5 you sold in scenario 2?

if you bought no replacement shares within the 30 days prior to or 30 days following when the 10 or 5 shares were sold, respectively, then there can not be a wash sale.
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iceport
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Re: Wash sale question

Post by iceport »

DCA2021 wrote: Fri Oct 22, 2021 8:19 pm Simple question after discussion with friend…


Scenario 1: I buy 10 shares of FB today at $100 sell all 10 shares at $90 in 5 days for a loss of $100. Is this a wash sale?

Scenario 2: same as scenario 1 but I sell 5 shares instead of all 10 for a total loss of $50. Is this a wash sale?
About 90% of anything you need to know about wash sales is summarized clearly and concisely in the first five of the articles on wash sales at Fairmark.com: The Wash Sale Rule.

The fourth article, Wash Sales and Replacement Stock, addresses the question arcticpineapplecorp. posed. The thing is, it's not always obvious what constitutes replacement stock — or more importantly, what the IRS considers replacement stock.

The examples in the fourth article should provide clear answers to the OP's questions.
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
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