I bought some stock through employee stock purchase plan (ESPP) on Dec 1st, 2008. I sold these stocks on Dec 5th for a modest profit. Then on Dec 8th I sold some stock from my old ESPP offerings to book long term capital loss. Since I have no long term gains this year, I plan to offset my short term gains using these long term capital losses. But I am worried about wash sale rules, since all these transactions happened within 30 days window.

I believe that I have not violated the spirit of the wash sale rule since the net effect of all these transactions is SELL. Am I right? Do I need to provide any special explanation for these transactions when preparing my taxes next year, or just report short/long term gains/losses in appropriate schedule.

Thanks and have a great day!

Taxpayer

Based on what you have posted, wash rules do not yet apply.

They WILL apply if you buy stock back within 30 days of your long-term loss sale.

A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: *Buy substantially identical stock or securities, *Acquire substantially identical stock or securities in a fully taxable trade, or
*Acquire a contract or option to buy substantially identical stock or securities.

You purchased stocks on Dec 1 and sold in the same month. Unless you buy stocks again within a period, it is not a wash sale.