wash sale rule question

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Robo
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Joined: Fri May 13, 2016 9:25 pm

wash sale rule question

Post by Robo »

Hi
Sold an etf in my wife's ira.
We also own it in our joint taxable account.
Want to buy more in joint taxable.
Being done as some rearranging of asset location etc
Can I do this immediately or do I have to wait 30 days?
Thanks
livesoft
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Re: wash sale rule question

Post by livesoft »

Selling in an IRA has nothing to do with wash sales.

So no problem with buying immediately or anytime in your taxable based on the information you presented.
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Topic Author
Robo
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Re: wash sale rule question

Post by Robo »

Thanks
Logically that made to sense to me as I didnt gain or lose anything tax wise from the IRA etf sale but wanted to check
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Nate79
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Re: wash sale rule question

Post by Nate79 »

Selling in an IRA certainly can cause a wash sale if you were also selling for a loss in a taxable account. Edit --> this is wrong. Ignore.
Last edited by Nate79 on Thu Jan 13, 2022 11:54 am, edited 1 time in total.
livesoft
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Re: wash sale rule question

Post by livesoft »

Nate79 wrote: Thu Jan 13, 2022 11:39 am Selling in an IRA certainly can cause a wash sale if you were also selling for a loss in a taxable account.
What?! Please explain.

I can see that buying in an IRA is able under some circumstances to cause a wash sale, but selling? I'm scratching my mind on that one.
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an_asker
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Re: wash sale rule question

Post by an_asker »

livesoft wrote: Thu Jan 13, 2022 11:41 am
Nate79 wrote: Thu Jan 13, 2022 11:39 am Selling in an IRA certainly can cause a wash sale if you were also selling for a loss in a taxable account.
What?! Please explain.

I can see that buying in an IRA is able under some circumstances to cause a wash sale, but selling? I'm scratching my mind on that one.
+1!
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Nate79
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Re: wash sale rule question

Post by Nate79 »

livesoft wrote: Thu Jan 13, 2022 11:41 am
Nate79 wrote: Thu Jan 13, 2022 11:39 am Selling in an IRA certainly can cause a wash sale if you were also selling for a loss in a taxable account.
What?! Please explain.

I can see that buying in an IRA is able under some circumstances to cause a wash sale, but selling? I'm scratching my mind on that one.
Sorry, I misread. You are correct.
aristotelian
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Re: wash sale rule question

Post by aristotelian »

Yes, unless you are trying to claim a loss in taxable there is nothing to worry about. If the stock in taxable were to go down after purchasing you would need to wait 30 days before selling to claim the loss
Last edited by aristotelian on Thu Jan 13, 2022 2:18 pm, edited 1 time in total.
livesoft
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Re: wash sale rule question

Post by livesoft »

aristotelian wrote: Thu Jan 13, 2022 11:57 am Yes, unless you are trying to claim a loss in taxable there is nothing to worry about. If the stock in taxable were to go down after purchasing you would need to wait 30 days before selling to claim the loss
The above statement is FALSE.

Why do Bogleheads have so many misconceptions about the wash sale rules? These things have been fleshed out so many times that one would've thought all falsehoods would have been obliterated already many times and they would not keep popping up.
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iceport
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Re: wash sale rule question

Post by iceport »

livesoft wrote: Thu Jan 13, 2022 1:33 pm Why do Bogleheads have so many misconceptions about the wash sale rules?
Because we don't repeat this often enough for enough Bogleheads to notice:

A half hour's careful reading of the first five of the Fairmark.com wash sale articles will provide about 95% of what they need to know.

The Wash Sale Rule

After reading those first five articles, they'll know about as much as any of the rest of us about the complexities of wash sale rules. (Though there will remain complexities of the rule that nobody in the country understands definitively.)

That's one possibility. Another is that folks try to apply the rule without first understanding its purpose. Without understanding what it is, exactly, the rule is intended to accomplish, its enormously more difficult to make sense of the rule — which is confusing enough even with that understanding.
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
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Lee_WSP
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Re: wash sale rule question

Post by Lee_WSP »

aristotelian wrote: Thu Jan 13, 2022 11:57 am Yes, unless you are trying to claim a loss in taxable there is nothing to worry about. If the stock in taxable were to go down after purchasing you would need to wait 30 days before selling to claim the loss
While the law and regs reference a section 179 deduction, I'm not sure that is the only way to trigger the adjusted basis rules.

I'm really not sure how you'd go about not claiming it as the whole sequence of events is important to establish any liability.

Also Fairmark says the service disagrees with their interpretation in a recent ruling.
Last edited by Lee_WSP on Thu Jan 13, 2022 2:16 pm, edited 1 time in total.
aristotelian
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Re: wash sale rule question

Post by aristotelian »

livesoft wrote: Thu Jan 13, 2022 1:33 pm
aristotelian wrote: Thu Jan 13, 2022 11:57 am Yes, unless you are trying to claim a loss in taxable there is nothing to worry about. If the stock in taxable were to go down after purchasing you would need to wait 30 days before selling to claim the loss
The above statement is FALSE.

Why do Bogleheads have so many misconceptions about the wash sale rules? These things have been fleshed out so many times that one would've thought all falsehoods would have been obliterated already many times and they would not keep popping up.
Apologies, I assumed they bought shares in their IRA. So there is really nothing to worry about! My point was, they weren't even claiming a loss in taxable so how could there be a wash sale?
an_asker
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Re: wash sale rule question

Post by an_asker »

livesoft wrote: Thu Jan 13, 2022 1:33 pm [...]
Why do Bogleheads have so many misconceptions about the wash sale rules? These things have been fleshed out so many times that one would've thought all falsehoods would have been obliterated already many times and they would not keep popping up.
The protagonists from this thread have now landed up on this thread lol.
livesoft
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Re: wash sale rule question

Post by livesoft »

Another rabbit hole has been dug and is actively being enlarged, lengthened, and deepened :twisted:
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iceport
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Re: wash sale rule question

Post by iceport »

an_asker wrote: Thu Jan 13, 2022 4:09 pm
livesoft wrote: Thu Jan 13, 2022 1:33 pm [...]
Why do Bogleheads have so many misconceptions about the wash sale rules? These things have been fleshed out so many times that one would've thought all falsehoods would have been obliterated already many times and they would not keep popping up.
The protagonists from this thread have now landed up on this thread lol.
Not a flattering exchange for the forum, I'll grant you that. :oops:

Though the discovery of the text of Revenue Ruling 56-602 made it a productive dialog for me.
"Discipline matters more than allocation.” |—| "In finance, if you’re certain of anything, you’re out of your mind." ─William Bernstein
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goingup
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Re: wash sale rule question

Post by goingup »

livesoft wrote: Thu Jan 13, 2022 4:19 pm Another rabbit hole has been dug and is actively being enlarged, lengthened, and deepened :twisted:
And this is why so much confusion and anxiety persists. :oops:
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