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TIMING IS EVERYTHING
July 24, 2002
The “wash sale” rules disallow losses if the same stock is bought within 30 days before OR after the loss sale. If you think, for example, that WorldCom is a screaming buy today, but you would like to deduct your losses on the WorldCom stock you sold yesterday, make sure 30 days have passed before you buy more WorldCom shares.
For most stock positions, the “trade date” is the effective date of a stock sale for tax purposes. For “short” positions sold at a loss, however, the “settlement” date is the effective date. At this point, the problem of losses on short positions is only theoretical, as they can only occur if a stock price rises.
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Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not neccesarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
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