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Old 08-30-2016, 12:37 PM
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Wash sale rule disallows loss from payment of quarterly dividend less than 1 month prior to sale?

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.

Thank you

daedalus


Last edited by daedalus : 08-30-2016 at 12:48 PM. Reason: add content


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Old 08-30-2016, 07:41 PM
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Quote:
Originally Posted by daedalus View Post
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.

Thank you

daedalus
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.



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