Question : Can I write off a part of a loss for tax saving?
I have invested $10,200 the past 3 years in a stock that has continued to decline. This year the stock had a reverse split of 40 to 1. I had 73,000 shares. Now I have 1825 shares. 2 1/2 years ago 10,000 share cost $4,000. Now 10,000 share = 250 share and cost 102.50. The stock looks to jump in the near future.Can I sell the 250 for the loss in 2006 and repurchase in 2007 for the lower price. Does this make tax logic?I do not want to sell the entire stock. I want to just sell 250 share that cost 4,000 keeping 1575 share and repurchase more in 2007. Thanks
- asked by David H
All Answers:
Answer #1
If I understand correctly, you made an investment3 years ago which has lost its value. You cansell it and buy it back 30 days later. This wouldallow you to take a tax loss and avoid the "washsale" rule. However, if you expect the stock tojump before that 30 day time period, then youshould not sell. Also note, you cannot buy thestock in another account while selling in anotherto cheat around the 30 day rule. The 30 daysapplies both BEFORE and AFTER the actual salesdate.
- answered by Mike Z
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