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Wash Sales added to Cost basis?

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L

laszlegal

Guest
Hello,
I traded activley this year and had a question regading wash sales. It is my understanding that you can add the loss from a wash sale to the cost basis of the next stock (as long as it is the same stock) that you purchased after you took the loss.

Now I hope this makes sense... If I took a loss on a sale, then made several trades after it for smaller profits, can I add the loss to each consectutive trade afterwards until the trade turns profitable?
As an example...a series of trades that once looked like this:
1000 shares of xxx -100
1000 shares of xxx +50
1000 shares of xxx +75
would instead look like this:
1000 shares of xxx -100
1000 shares of xxx -50 (added 100 loss to cost)
1000 shares of xxx +25 (added 40 loss to cost)

Thanks in advance...
 


abezon

Senior Member
It's not that you can add the wash loss to basis, you MUST do so. However, as a practical matter if you do not own the stock at the end of the year (& have no wash sales straddling 12/31), you can ignore the wash sale rule.

You cannot apply the wash sale rule to trades that fall outside the 30 day limit.

If you have wash sales, you should pay someone to do your taxes/schedule D for you. It will be much easier & you can see how they did it & copy their methods next year.
 

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