Wash sales question

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Topic Author
Ccthealias
Posts: 46
Joined: Fri Dec 29, 2023 7:52 am

Wash sales question

Post by Ccthealias »

How is wash sales determine if you sold and brought and identical asset in a different account and then sold it again so example

Spouse 1- sold fund x jan 31st at a loss
Spouse 2- brought fund x jan 15 in Roth IRA and sold fund c feb 15- loss/gain is irrelevant here

Is the losses in spouse 1 still consider a wash sale?
livesoft
Posts: 85785
Joined: Thu Mar 01, 2007 7:00 pm

Re: Wash sales question

Post by livesoft »

This situation is a permanently disallowed loss in the taxable account for the same number of shares bought in the Roth IRA not to exceed the number of shares sold at a loss in the taxable account. If the shares in the taxable account have different "Date Acquired", then the disallowed loss is calculated from the First shares acquired (that is, the oldest shares sold), so the disallowed loss might be larger than for the newest shares sold.

If you like, then you can add the disallowed loss to the cost basis of the shares in the Roth, but that doesn't help you at all, does it?
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student
Posts: 10619
Joined: Fri Apr 03, 2015 6:58 am

Re: Wash sales question

Post by student »

Livesoft gave you the correct answer. Don't feel bad, I have made a similar mistake before.
Topic Author
Ccthealias
Posts: 46
Joined: Fri Dec 29, 2023 7:52 am

Re: Wash sales question

Post by Ccthealias »

livesoft wrote: Sun Feb 11, 2024 7:50 am This situation is a permanently disallowed loss in the taxable account for the same number of shares bought in the Roth IRA not to exceed the number of shares sold at a loss in the taxable account. If the shares in the taxable account have different "Date Acquired", then the disallowed loss is calculated from the First shares acquired (that is, the oldest shares sold), so the disallowed loss might be larger than for the newest shares sold.

If you like, then you can add the disallowed loss to the cost basis of the shares in the Roth, but that doesn't help you at all, does it?
Another question but more future planning-

What if I purchase the asset in Roth Jan 1st sold it Jan 31st
Can I sell the same asset in taxable with a loss if I no longer own the asset in the Roth?
Basically I am trying to optimize my investment mix across Roth, traditional and taxable while trying to minimize by capital gains with the selling
bonesly
Posts: 862
Joined: Mon Dec 18, 2017 9:28 pm
Location: WA

Re: Wash sales question

Post by bonesly »

Ccthealias wrote: Sun Feb 11, 2024 9:38 am What if I purchase the asset in Roth Jan 1st sold it Jan 31st
Can I sell the same asset in taxable with a loss if I no longer own the asset in the Roth?
Basically I am trying to optimize my investment mix across Roth, traditional and taxable while trying to minimize by capital gains with the selling
The loss is in a taxable sale is disallowed if the "substantially identical" position is purchased 31 days before or after the sale (across all household accounts).

If you buy in Roth on 1-Jan, then you can sell in taxable on 1-Feb (no wash sale as 1-Jan + 31 days = 1-Feb). You might want to use the settlement date for the buy in the Roth rather than the trade date or your broker might still check the box on your 1099 that says "loss disallowed" for the taxable account sale (assuming same broker for Roth and taxable).
livesoft
Posts: 85785
Joined: Thu Mar 01, 2007 7:00 pm

Re: Wash sales question

Post by livesoft »

Ccthealias wrote: Sun Feb 11, 2024 9:38 am What if I purchase the asset in Roth Jan 1st sold it Jan 31st
Can I sell the same asset in taxable with a loss if I no longer own the asset in the Roth?
Basically I am trying to optimize my investment mix across Roth, traditional and taxable while trying to minimize by capital gains with the selling
Yes, that would be fine by me, but you and I both know you cannot buy on Jan 1st. LOL!

But you could buy in a Roth account on Day X, sell in that account on Day X+N for either a gain OR a loss, then you sell for a loss in any other account on Day X+N+Y (where Y>0) without creating a wash sale.

You might wish to read these documented trades I made to try to create a wash sale: viewtopic.php?p=7505983#p7505983 and also read the rest of that thread.
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