Thanks. In reality, I used easy numbers and I should have changed it to selling 50 and buying 100 instead of the other way around.
Did I correctly change the cost basis by what I did? Or is there some other way? Thanks On Tue, Dec 17, 2024 at 2:40 PM Stan Brown (using GC 4.14) < stan...@fastmail.fm> wrote: > 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 > > -- _________________________________ Richard Losey rlo...@gmail.com Micah 6:8 _______________________________________________ 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.
