Sorry, another wash sale question

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Topic Author
Streptococcus
Posts: 425
Joined: Wed Jan 02, 2013 11:17 pm

Sorry, another wash sale question

Post by Streptococcus »

I just called vanguard to inquire if I had incurred an accidental wash sale.
Today 10/13, I basically sold all vanguard total international shares: 1,792.257 shares
Then I realized that on 9/23, I reinvested dividends and bought 9.414 shares ( :oops:)
and on 9/22 I had made a purchase for 32.495 shares (Re :oops: )

So I had bought new shares less than 30 days ago and I sold everything. The vanguard rep is adamant that this is not a wash sale because I did not buy an identical fund. I told him that I believe it is wash sale because I sold new shares less than 30 days prior to selling everything. Who is right? I would hate to be right :annoyed

If I'm right is it a partial wash sale? Can I claim taxes on the share difference?
Thanks
User avatar
House Blend
Posts: 4878
Joined: Fri May 04, 2007 1:02 pm

Re: Sorry, another wash sale question

Post by House Blend »

The Vanguard Rep is correct. Not a wash.

Suppose instead you sold all of your shares except for the 32.495+9.414 shares you bought on 9/22 and 9/23.

Those shares would then be participating in a wash sale. So some of the loss in the sale of the other 1792.257-32.495-9.414 shares you sold would be added to those shares; i.e., their cost basis would increase.

Then a microsecond later, you sold those 32.495+9.414 washed shares, recouping the loss.

The effect is the same as if it were not a wash sale to begin with.

If it helps, you can think of what you did as a wash sale that lasted for a microsecond.
Topic Author
Streptococcus
Posts: 425
Joined: Wed Jan 02, 2013 11:17 pm

Re: Sorry, another wash sale question

Post by Streptococcus »

House Blend wrote:The Vanguard Rep is correct. Not a wash.

Suppose instead you sold all of your shares except for the 32.495+9.414 shares you bought on 9/22 and 9/23.

Those shares would then be participating in a wash sale. So some of the loss in the sale of the other 1792.257-32.495-9.414 shares you sold would be added to those shares; i.e., their cost basis would increase.

Then a microsecond later, you sold those 32.495+9.414 washed shares, recouping the loss.

The effect is the same as if it were not a wash sale to begin with.

If it helps, you can think of what you did as a wash sale that lasted for a microsecond.
Thank you House Blend!
placeholder
Posts: 8421
Joined: Tue Aug 06, 2013 12:43 pm

Re: Sorry, another wash sale question

Post by placeholder »

The way to realize it is that the wash rules say that the shares were the replacements get a step up in basis to account for the tax loss you didn't get buuut you don't have those shares anymore because they also were sold.
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