| What is a Wash Sale?
What is a Wash Sale?
In general, the IRS states that " you have a wash sale if you sell stock at a loss, and buy substantially identical securities within 30 days before or after the sale."
What are the Consequences of a Wash Sale
The wash sale rule actually has three tax consequences which are listed below:
1. The Taxpayer is disallowed to claim the loss on your sale.
2. The disallowed loss is added to the basis of the replacement stock.
3. The Taxpayer's holding period for the replacement stock includes the holding period of the stock that was sold.
So, in your particular case, it seems that you have a wash sale, "as you purchased an identical stock(SDNK) that you sold at a loss within 30 days of the day of sale."
Hence, a capital loss will be disallowed for this transaction in 2007! | 
