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Old 12-15-2017, 03:01 PM
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Capital Losses and partial holdings sale

If a person holds a losing position of 300 shares, can that person sell just enough shares, 72 shares, to max out the $3000.00 capital loss and still hold on to the other 228 shares? All shares were bought at the same time in 2015 (all are long term).

I understand not being able to buy the same stock back because of the wash rule but can not seem to get a definitive answer on this.

Thank you.



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Old 12-15-2017, 11:19 PM
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If a person holds a losing position of 300 shares, can that person sell just enough shares, 72 shares, to max out the $3000.00 capital loss and still hold on to the other 228 shares? All shares were bought at the same time in 2015 (all are long term). ======>Of course UNLeSS yu paurchase same identical shares within th eimited tiem interval of 30 days; basically as you can see, the Wash-Sale rule is to disallow a loss deduction of a security sold, if within 30 days of the date of the sale an investor buys substantially identical stock or securities, or purchases options on the underlying security. Say, you buy 100 shares of A tech stock on Nov. 1 for $10k. On Dec. 15, the value of the 100 shares has declined to $7k, so you sell the entire position to realize a capital loss of $3k for the tax deduction purposes. On Dec. 25 of the same year, you repurchase the 100 shares of A tech stock back again to reestablish your position in the stock. The initial loss will be not be allowed since the security was repurchased within the limited time interval. The wash-sale period is actually 61 days, consisting of the 30 days before to 30 days after the date of sale.




I understand not being able to buy the same stock back because of the wash rule but can not seem to get a definitive answer on this.==========>>as mentioned above;



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Old 12-17-2017, 02:40 PM
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Makes sense to me but then again other things do also that aren't allowed. Just could not find anywhere that stipulated whether you can keep shares in a position while simultaneously claiming a capital loss or you have to sell out the entire position in order to claim a capital loss. If a 3000 dollar loss can save me 3% in taxes (25% versus 28%) then it's a no-brainer. Next year if the same issue arises and I am still holding this losing stock, I will do the same thing...at that point the IRS will know I kept shares from stock I claimed a capital loss from. I am assuming that IF I do not buy back shares within the wash rule period, that holding previously owned shares is not a problem.



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Old 12-18-2017, 12:25 AM
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Originally Posted by bstephenson View Post
Makes sense to me but then again other things do also that aren't allowed. Just could not find anywhere that stipulated whether you can keep shares in a position while simultaneously claiming a capital loss or you have to sell out the entire position in order to claim a capital loss. If a 3000 dollar loss can save me 3% in taxes (25% versus 28%) then it's a no-brainer. Next year if the same issue arises and I am still holding this losing stock, I will do the same thing...at that point the IRS will know I kept shares from stock I claimed a capital loss from. I am assuming that IF I do not buy back shares within the wash rule period, that holding previously owned shares is not a problem.
What you mean is exactly what I understand; I mean yes it is a sort of your taxation strategy that the IRS doesn?t care too much; basically, s you kinow aslongas your capital losses exceed capital gains, the you are entitled to claim a deduction against the loss in the amount of $3K or the total net loss, whichever is less. When a net capital loss exceeds the $3K limit, you may freely carry forward to future years.Hpowever, in the following year, the loss carried forward would first be used to offset potential capital gains si\o I mean your CG needs to exceed at least $3K to claim on your return in the next year?s 1040. So, if capital losses still exceed capital gains, you can claim up to $3K as a loss and continue doing so year over year until the net loss amount is reduced to zero.But remember,capital gains, however, cannot be carried forward. Once an asset is sold for more than its original purchase price and a gain is realized, the gain must be declared in full on that year's taxes. For this reason, those looking to sell off assets should do so strategically to minimize any potential tax burden that might ensue.

For more professional help, please contact an IRS Enrolled Agent/a CPA doing taxes in your local area for your return.



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