Wash Sale rule of 30 days

Not A Clue

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Dec 21, 2021, 11:02:22 AM12/21/21

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If I buy a stock on the 24th of the month, when does the 30 days starts -- 24th? or 25th?

And I assume the 30-day is on a calendar basis and includes holidays and weekends?

TIA

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ira smilovitz

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Dec 21, 2021, 11:42:46 AM12/21/21

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On Tuesday, December 21, 2021 at 11:02:22 AM UTC-5, Not A Clue wrote:
> If I buy a stock on the 24th of the month, when does the 30 days starts -- 24th? or 25th?
>
> And I assume the 30-day is on a calendar basis and includes holidays and weekends?
>
> TIA
>
> --

I'm not sure why you care about 30 days from the purchase. If you are concerned about a wash sale, you need to count 30 days (before and after) from the sale date. The sale date itself does not get included and the purchase of the replacement shares must be more than 30 days from the sale date.

Ira Smilovitz, EA
Leonia, NJ

Stuart O. Bronstein

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Dec 21, 2021, 12:28:16 PM12/21/21

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ira smilovitz <ira.sm...@gmail.com> wrote:
> Not A Clue wrote:

>> If I buy a stock on the 24th of the month, when does the 30 days
>> starts -- 24th? or 25th?
>>
>> And I assume the 30-day is on a calendar basis and includes
>> holidays and weekends?
>

> I'm not sure why you care about 30 days from the purchase. If you
> are concerned about a wash sale, you need to count 30 days (before
> and after) from the sale date. The sale date itself does not get
> included and the purchase of the replacement shares must be more
> than 30 days from the sale date.

But it's "within" 30 days, not less than 30 days after the sale. So if
the date of sale was less than 30 days after the date of purchase, the
rule might also apply.

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Stu
http://DownToEarthLawyer.com

ira smilovitz

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Dec 21, 2021, 1:03:42 PM12/21/21

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On Tuesday, December 21, 2021 at 12:28:16 PM UTC-5, Stuart O. Bronstein wrote:
> ira smilovitz <ira.sm...@gmail.com> wrote:
> > Not A Clue wrote:
>
> >> If I buy a stock on the 24th of the month, when does the 30 days
> >> starts -- 24th? or 25th?
> >>
> >> And I assume the 30-day is on a calendar basis and includes
> >> holidays and weekends?
> >
> > I'm not sure why you care about 30 days from the purchase. If you
> > are concerned about a wash sale, you need to count 30 days (before
> > and after) from the sale date. The sale date itself does not get
> > included and the purchase of the replacement shares must be more
> > than 30 days from the sale date.
> But it's "within" 30 days, not less than 30 days after the sale. So if
> the date of sale was less than 30 days after the date of purchase, the
> rule might also apply.
>
> --
> Stu
> http://DownToEarthLawyer.com
> --

Not really, at least not the way you've written it. Wash sales deal with replacement shares. If you buy a stock and sell the same shares within 30 days, you don't have a wash sale *unless* the sale generated a loss *and* you purchase replacement shares within the 30 day window before and after the sale date. So the purchase date in the original post is irrelevant to the question asked.

And, to answer a question from the original question that was overlooked, it's 30 calendar days, not trading days.

Ira Smilovitz, EA
Leonia, NJ

Not A Clue

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Dec 21, 2021, 8:32:59 PM12/21/21

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Let me rephrase. Long story short, the purchase is an unintended dividend reinvestment of stock xyz; and have a loss on the reinvestment and I have no intention to add to my position in stock xyz if I sell the reinvestment. And I am not selling my position in stock xyz itself, just the last reinvestment. If I sell [the reinvestment] right after the dividend reinvestment, I would trigger the wash-sale rule. Hence the question: what is the soonest I can sell the reinvestment without triggering the wash sale rule.

The dividend reinvestment was on Nov 24th. 30 days from that date would be Dec 24th. And I can sell on Dec 24th? 25th? -- assuming they are not holidays.

ira smilovitz

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Dec 22, 2021, 10:15:40 AM12/22/21

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The added information is essential to the correct answer. If you instruct the broker to sell the specific lot of shares purchased on November 24 and you don't make any other purchases of the same stock for another 30+ days after the sale, you will avoid a wash sale and can take the loss now. If you just tell the broker to sell x shares (equal to the number of shares you just bought), shares will probably be sold using the First-In, First-Out method. This may trigger a wash sale if the shares sold generate a loss.

Stated differently - if you just tell the broker to sell x shares, the shares sold will be chosen based on the default method used by your broker to choose shares. This is usually FIFO, but some brokers allow you specify other default methods. If this sale results in a loss, you will have triggered a wash sale. If this sale results in a gain, there is no adjustment. However, you can tell the broker to sell a specific lot of shares (the reinvestment shares) which will allow you to take the loss currently as long as you don't make another purchase within the wash sale window.

Ira Smilovitz, EA
Leonia, NJ

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