Confused about wash sale rule

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l1am
Posts: 157
Joined: Wed Mar 02, 2016 2:27 pm

Confused about wash sale rule

Post by l1am » Tue Feb 12, 2019 1:43 am

I acquired company stock in the from of RSUs and the trading window only allowed me to sell (at a loss) within 30 days of release. Anyone have any idea how to report this, and if they're both considered wash sales, which shares should get the cost basis adjustment?

For context:
- The Nov 29th sale is for the total shares received in May & August.
- The Dec 6th sale is for the total shares received in November.

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bloom2708
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Re: Confused about wash sale rule

Post by bloom2708 » Tue Feb 12, 2019 10:50 am

I do not think you have to do anything.

Your 1099-B would have the details. Any dis-allowed losses will be denoted with a W for wash sale. You mark that checkbox for that 1099-B item and the loss is not allowed.

Wash sales are pretty minor in the grand scheme of things. It means you sold some shares at a loss and then purchased the same stock back again in the 30 day period following.

Your chart doesn't show if the shares had a gain or a loss from when you acquired them. If the shares sold had gains, there is no wash sale. Let's say shares sold had a small loss. $200. If you are not allowed to take that loss, the impact on your taxes is 22% or 24% of $200.

See what your 1099-B shows for those lots. I would not expect a huge impact. Note any wash sales accordingly when entering the 1099-Bs.
"A Stoic believes they don’t control the world around them, only how they respond--and that they must always respond with courage, temperance, wisdom, and justice." --Daily Stoic

Topic Author
l1am
Posts: 157
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Re: Confused about wash sale rule

Post by l1am » Tue Feb 12, 2019 2:56 pm

bloom2708 wrote:
Tue Feb 12, 2019 10:50 am
I do not think you have to do anything.

Your 1099-B would have the details. Any dis-allowed losses will be denoted with a W for wash sale. You mark that checkbox for that 1099-B item and the loss is not allowed.

Wash sales are pretty minor in the grand scheme of things. It means you sold some shares at a loss and then purchased the same stock back again in the 30 day period following.

Your chart doesn't show if the shares had a gain or a loss from when you acquired them. If the shares sold had gains, there is no wash sale. Let's say shares sold had a small loss. $200. If you are not allowed to take that loss, the impact on your taxes is 22% or 24% of $200.

See what your 1099-B shows for those lots. I would not expect a huge impact. Note any wash sales accordingly when entering the 1099-Bs.
My 1099-B doesn't have W marked, although I'm not sure if this broker is reporting it properly. I'll contact them.

These were all STCG losses.

Topic Author
l1am
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Re: Confused about wash sale rule

Post by l1am » Wed Feb 13, 2019 4:14 pm

Final bump

megabad
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Re: Confused about wash sale rule

Post by megabad » Wed Feb 13, 2019 5:55 pm

Your post implies that you no longer own any RSU in this company after these events. If there are no replacement shares I don't see how there can be a wash sale.

Topic Author
l1am
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Re: Confused about wash sale rule

Post by l1am » Wed Feb 13, 2019 9:49 pm

megabad wrote:
Wed Feb 13, 2019 5:55 pm
Your post implies that you no longer own any RSU in this company after these events. If there are no replacement shares I don't see how there can be a wash sale.
No, I still own RSUs from the earlier releases.

DanEmmy
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Re: Confused about wash sale rule

Post by DanEmmy » Wed Feb 13, 2019 10:21 pm

I have a similar situation. I traded some company RSUs that had vested for ITOT (SP 1500 Index). I was suprised to see several wash sales on my 1099B. Is it because ITOTs may include this company? It's not that big of a company... Does ANY overlap trigger a wash?

Nate79
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Re: Confused about wash sale rule

Post by Nate79 » Wed Feb 13, 2019 10:39 pm

DanEmmy wrote:
Wed Feb 13, 2019 10:21 pm
I have a similar situation. I traded some company RSUs that had vested for ITOT (SP 1500 Index). I was suprised to see several wash sales on my 1099B. Is it because ITOTs may include this company? It's not that big of a company... Does ANY overlap trigger a wash?
No, it most assuredly is not related to a single company vs and ETF of hundreds of companies. Those are clearly not substantially identical. You have something else going on.

rkhusky
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Re: Confused about wash sale rule

Post by rkhusky » Thu Feb 14, 2019 6:48 am

bloom2708 wrote:
Tue Feb 12, 2019 10:50 am
Wash sales are pretty minor in the grand scheme of things. It means you sold some shares at a loss and then purchased the same stock back again in the 30 day period following.
The wash sale period also includes the 30 days before you sell for a loss.

The Nov 15th purchases caused 548 shares of the Nov 29 sale to be washed. The Nov 15 shares would receive the basis adjustment. When you sold those shares on Dec 6 you recouped the wash sale disallowment through the basis adjustment. Assuming there were no other transactions in Nov/Dec and no purchases in January 2019, the result would be as if there were no wash sale.

Topic Author
l1am
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Re: Confused about wash sale rule

Post by l1am » Fri Feb 15, 2019 12:44 am

rkhusky wrote:
Thu Feb 14, 2019 6:48 am
The Nov 15th purchases caused 548 shares of the Nov 29 sale to be washed. The Nov 15 shares would receive the basis adjustment. When you sold those shares on Dec 6 you recouped the wash sale disallowment through the basis adjustment. Assuming there were no other transactions in Nov/Dec and no purchases in January 2019, the result would be as if there were no wash sale.
Why wouldn't the basis shift to the older shares? And if what you're saying is true, do I still have to report it was a wash sale.

rkhusky
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Re: Confused about wash sale rule

Post by rkhusky » Fri Feb 15, 2019 6:10 am

l1am wrote:
Fri Feb 15, 2019 12:44 am
rkhusky wrote:
Thu Feb 14, 2019 6:48 am
The Nov 15th purchases caused 548 shares of the Nov 29 sale to be washed. The Nov 15 shares would receive the basis adjustment. When you sold those shares on Dec 6 you recouped the wash sale disallowment through the basis adjustment. Assuming there were no other transactions in Nov/Dec and no purchases in January 2019, the result would be as if there were no wash sale.
Why wouldn't the basis shift to the older shares? And if what you're saying is true, do I still have to report it was a wash sale.
The Nov 15 shares are the replacement shares and are those that caused the wash sale. If you had switched the order and sold the Nov 15 shares on Nov 29, and the May & August shares on Dec 6, then there would not have been a wash sale.

Report the wash sale if you want your return to be accurate.

Topic Author
l1am
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Re: Confused about wash sale rule

Post by l1am » Fri Feb 15, 2019 11:50 am

rkhusky wrote:
Fri Feb 15, 2019 6:10 am
The Nov 15 shares are the replacement shares and are those that caused the wash sale. If you had switched the order and sold the Nov 15 shares on Nov 29, and the May & August shares on Dec 6, then there would not have been a wash sale.

Report the wash sale if you want your return to be accurate.
Do you have that backwards?

If I had sold the Nov 15 shares on Nov 29, that would be a wash.

rkhusky
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Re: Confused about wash sale rule

Post by rkhusky » Fri Feb 15, 2019 1:07 pm

l1am wrote:
Fri Feb 15, 2019 11:50 am
rkhusky wrote:
Fri Feb 15, 2019 6:10 am
The Nov 15 shares are the replacement shares and are those that caused the wash sale. If you had switched the order and sold the Nov 15 shares on Nov 29, and the May & August shares on Dec 6, then there would not have been a wash sale.

Report the wash sale if you want your return to be accurate.
Do you have that backwards?

If I had sold the Nov 15 shares on Nov 29, that would be a wash.
Can you then identify the replacement shares purchased 30 days plus/minus of Nov 29 that you would still own?

Topic Author
l1am
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Re: Confused about wash sale rule

Post by l1am » Fri Feb 15, 2019 2:38 pm

rkhusky wrote:
Fri Feb 15, 2019 1:07 pm
Can you then identify the replacement shares purchased 30 days plus/minus of Nov 29 that you would still own?
I see what you mean now, we're also assuming that lots matter here though - from what I read about wash sales, they don't.

rkhusky
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Re: Confused about wash sale rule

Post by rkhusky » Fri Feb 15, 2019 11:04 pm

l1am wrote:
Fri Feb 15, 2019 2:38 pm
rkhusky wrote:
Fri Feb 15, 2019 1:07 pm
Can you then identify the replacement shares purchased 30 days plus/minus of Nov 29 that you would still own?
I see what you mean now, we're also assuming that lots matter here though - from what I read about wash sales, they don't.
The IRS has definite rules for matching wash sale lots, even If you have multiple sales and purchases with overlapping wash sales. Generally, you start matching with the earliest shares purchased/sold and work your way forward in time. The only time you get to choose which shares to match is when you can’t tell which shares were transacted first, like your lots on Nov 15.

For further info see: https://www.bogleheads.org/wiki/Wash_sale and https://fairmark.com/investment-taxatio ... gain/wash/

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