A wash sale is essentially the sale of stock or a security at a loss where the taxpayer acquires a "substantially identical" share or security within 30 days before or after the date of the sale, leaving the taxpayer's investment position substantially unaltered. In this situation, the taxpayer may not deduct the loss unless he is a dealer in stock or securities and the loss is sustained in a transaction made in the ordinary course of that business.
Sir: Can I deduct loss for 1999 if I sold stock at a profit, and then 3 days later bought same stock but sold for a loss. Is looss deductable for 1999 period?
If I bought 100 shares of PCLN on Dec 4,1999 at $52 then sold at $60 on Dec 6,1999 I have profit of $800. Now If I re-buy on Dec 7,1999 100 shares PCLN for $57 and sell on Dec, 29 1999 at price of $53 for a loss of $400- can I take (apply)loss for 1999 year?
The taxpayer sells 500 shares of ATHM having a basis in his hands of $50,000 on Dec. 28 for $30,000, realizing a $20,000 capital loss before year end. On Jan. 3, he acquires an identical position in ATHM for 30,000. His investment posture is substantially unchanged. The $20,000 loss sustained does not reflect a true economic loss recognizable for tax purposes.