Originally Posted by daedalus
Hi to all,
I sold a stock for about a $7000.00 loss less than 1 month after payment of the dividend ($120.00); does this dissallow the deduction of the entire $7000.00 capital loss? I will not buy any more shares of this stock.
When a stock is sold at a loss, then bought back again within 30 days of the trade date for the sale, the loss on the number of shares represented that purchase is disallowed. Such disallowed loss is added to the basis of the repurchased shares, and the holding period for these shares includes the holding period for the original shares.
but Reinvested dividends in the period +/- 30 days from a sale at a loss can trigger the wash sale rule. This is a very common problem in the case of mutual funds with monthly distributions.