[shinallsm]

Question

Sold 500 shares of XYZ corp. stock at 20 per share. Green purchased these shares two years prior at $22 per share. Three weeks SUBSEQUENT to the sale, Green purchased 100 shares of XYZ stock at 18 per share.

Becker Answer:

($800)

In this example, three weeks prior to the sale of 500 shares of XYZ Corp. stock, Green purchased 100 shares of the XYX Corp. stock. For purposes of applying the wash sale loss disallowance rule in order to determine loss recognized, the purchase price of these 100 shares is irrelevant, but the purchase price would be relevant to determine the basis of these 100 shares. So, with respect to the loss on the sale of the 500 shares, Green cannot recognize (deduct) the loss on 100 shares of the 500 shares sold. The loss per share is $2. Because Green can recognize the loss only with respect to 400 of the 500 shares sold, the recognized loss is $800: $2 per share loss times 400 shares for which the loss can be recognized.

The question says subsequent to the sale, as in after? yet the explanation says three weeks prior to the sale green purchased 100 shares. Would this actually impact the answer to the question, if the purchase was made after and not before?

Thanks,

Matt

REG - 90 - 10/31/14
FAR - 77 - 1/3/15
AUD - 89 - 4/1/15
BEC - ?? - 5/27/15

[rzrbkfaith]

It's within 30 days before or after the sale, so even if the wording was wrong, the rule still applies.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Author]

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