On 2024-12-17 10:43, R Losey wrote: > So, early this year, I (unwittingly) did a wash sale. I have heard of wash > sales before, but I had made an invalid assumption.
You have my sympathy. The wash-sale rules are annoyingly complex, and IMHO the tax money the Treasury gets doesn't justify the record-keeping complexity for people who are not in the business of buying and selling. (People who are in that business aren't subject to the wash sale rule.) And if you have automatic reinvestment of dividends, that creates a wash sale if you sell any shares within 30 days before or after receiving the dividend. > In case anyone else doesn't know, in the US, if you sell a stock for a > loss, and repurchase it within 30 days, you are not allowed to claim the > capital loss. This is called a "wash sale". Two notes: (1) It's a wash sale if buying and selling take place within 30 days of each other, regardless of which comes first. (2) If you buy less than you sold, you can still claim a capital loss on the shares sold that exceed the shares bought. Below you say you sold 100 shares and bought 50; thus you can still claim capital loss on the 100-50 = 50 shares that you didn't repurchase. (2a) As you noted in your transaction template, you can't claim the capital loss on a wash sale, but you can add the nonallowed capital loss to your basis in the shares purchased. Reference: Publication 550, starting at page 56 <https://www.irs.gov/pub/irs-prior/p550--2020.pdf> (I'm not a tax expert, but I've participated in discussions on misc.taxes.moderated so I'm pretty sure I've got this straight.) > I am trying to work out how I properly record this in GnuCash. I have > worked out something (based upon what an accountant said), but I wanted to > run it by this group as a check. > > Anyway, I sold all my shares (100) in stock X for a loss of Y and the > following week purchased 50 shares. > > So, I have recorded this as two multi-split transactions. > > In the stock X account, split #1 > DEBIT: sale price to the sweep fund > DEBIT: long term capital gain with Y (I supposed technically, it's a > "negative credit" because it's a loss, but this works) > CREDIT: selling 100 shares of stock X at the sale price > CREDIT: cost basis of stock X (again, technically, a negative debit, but > this works) > > One week later, in the stock X account, split #2: > DEBIT: purchase 50 shares of stock X for the cost > DEBIT: cost basis of wash sale (Y) > CREDIT: long term capital gain with Y (to zero out the loss that I cannot > claim, and to add it to the cost basis of stock X) > CREDIT: sweep fund for cost of purchase > > Does this seem the correct way to go about this? (it definitely leaves a > zero LT capital gain for stock X, which is what I needed to have happen). I'm not sure you do. Only 50 shares of the sale are wash sale; the other 50 are an ordinary capital loss, either short- or long-term depending on how long you held them. (See "More or less stock bought than sold" near the end of page 56 of Pub 550.) From these two transactions I think you should end up with a negative in your Capital gain/loss account in GC. P.S. If you incur commissions and fees, remember that these affect your basis also. Stan Brown Tehachapi, CA, USA https://BrownMath.com _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
