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Hecla Mining Co. Message Board

  • wyncee wyncee Apr 25, 2013 12:32 PM Flag

    I can't buy HL for 30 days or I lose my tax deduction on a loss.

    I sold some HL at a loss (had to - as I foolishly bought on margin). Anyway - I can use the loss as a tax deduction - but I believe the law is that I can't re-buy the same stock for 30 days without losing the ability to claim the loss. So - my question is: "Which miners should I buy during the next 30 days (after which I will be free to re-purchase HL)? (GPL and SVM are also off limits for the same reason).

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    • In 30 day's you might be buying it for $2. So be happy. Of course if it goes to ZERO even $2 won't look too good.

    • Buy SIL Calls... Roll back into HL after the expiration. SLW works, as will PASS. You cannot move back into HL but you can buy similar securities.

    • While you are waiting the 30 day's for the "wash to dry" so to speak, put it in Pan American Silver.

    • Yes, it is a "wash sale" and the tax laws are hard to understand as to just exactly what actually happens.

      If you are at least a mini-trader (in and out of the same stock during the year more than just a few times) the wash sale (the loss) is not "lost"......the cost basis of the stock is "adjusted" on each trade in a way that allows the loss on the wash sale to be "taken" over time.

      However, if you do buy HL back before the 30-day period, and then hold the stock all the way to the end of the year the "wash sale" will stand, and you will get stuck with not being able to show it on your return as a loss. It will be on your return, but labeled as a "wash sale", and will NOT be deductible.

      So, ideally, if you feel comfortable enough to trade HL 5-6 times (winning trades of course) before Dec 31, 2013, it will all "even-out" due to the cost basis adjustment that is applied to the purchase price on each subsequent trade.

      Another thing.....IRS gets "excited" about buying a stock within the same "group" (ie, miners) to try to get around their wash sale rule.....so buying, say CDE, and holding it till end of year will raise a red flag.....so look to "trade" in and out enough to allow time for the cost basis adjustment to take effect.

      Isn't the IRS fun.........

      Check with drawnfire911......maybe he can add to this and make it more understandable.

      Good luck......

      • 2 Replies to nsxt2003
      • Uhhh this is not true. First, a "wash sale" is when a person simultaneously books a gain and an off-setting loss thus making the proceeds net tax free.

        The thirty day rule is accurate...you cannot book a loss and subsequently invest back in the same name within thirty days.

        As for booking a loss and then reinvesting proceeds in a similar but different company.....I have never seen any IRS code that forbids this or even mentions it. Common sense would tell you that it would be almost impossible to enforce. I know of people that have booked losses in SLV for tax purposes and immediately reinvested the proceeds in PSLV....without issue. If you have some documentation that shows the IRS gets "excited" about such transactions I would be very interested.

      • Thanks for taking the time to explain. It does seem complicated. How does one know how to "adjust" the cost basis on multiple in and out trades? It sounds like a logistical nightmare.

    • Look at AUNFF and PGLC.

    • IMO you are a fool. GLTU. SS

      Sentiment: Buy

 
HL
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