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    tax_payer_111's Avatar
    tax_payer_111 Posts: 1, Reputation: 1
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    #1

    Dec 10, 2008, 11:48 PM
    Multiple stock trades within a month and wash sale rules
    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
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Dec 11, 2008, 10:41 AM
    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.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #3

    Dec 12, 2008, 11:09 PM

    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.
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