Sale of silver stock

[flytyer]

undefined Washington state.

Last week I sold a silver stock I have owned for 3 years. It had a nice little gain.

My question regards the tax liability this year on the sale of that stock. I intend to re-enter another position in the same stock with the same amount of money received from the sale. I expected a little pull back and that did happen.

If I re-enter with the same amount of money in the same exact stock at a slightly lower price will I still be liable from the gain on the original sale last week?

Thanks for any response.

 

[LdiJ]

undefined Washington state.

Last week I sold a silver stock I have owned for 3 years. It had a nice little gain.

My question regards the tax liability this year on the sale of that stock. I intend to re-enter another position in the same stock with the same amount of money received from the sale. I expected a little pull back and that did happen.

If I re-enter with the same amount of money in the same exact stock at a slightly lower price will I still be liable from the gain on the original sale last week?

Thanks for any response.

Yes, you will still be responsible for the gain.

 

[efflandt]

As long as you had a gain on the original stock, it is a long term capital gain (over a year).

However, if you sold the original stock at a "loss" and purchased essentially the same security within 30 days (past or future), you could not take the loss now, it would be factored into cost basis for what you rebought per wash sale rules http://www.irs.gov/instructions/i1040sd/ch01.html#d0e370

 

[flytyer]

Ldij and efflandt,

Thank you for your responses and the link.

From the link and thinking of what you have told me it seems like the only way to offset the gain would be to sell another stock which did not respond as hoped. In other words if I have a stock that has slipped, which I do, could the loss incurred there be applied against the gain from the former?

If so, can this stock which has decreased be purchased and sold within the same calendar year and still count as a loss on this years taxes, or does it need to be a longer term loss, ie. span more than a calendar year?

It also looks like the wash rule would preclude me from re-entering the same stock for at least 30 days. Otherwise from what I read I would then not be able to claim the loss.

Is that how you see it also?

Thanks again.

 

[abezon]

Gains & losses are combined to determine net taxable gain (loss) each year. The loss can be short term or long term. You may not purchase substantially similar stock within 30 days of the loss sale (before or after). Because of the way the long term capital gains rates work, it is better to try to balance short term gains with short term losses & long term with long term.