If you use it with "wash trade".
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illegal trading strategies
- Thread starter firstchoice
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If you use it with "wash trade".
Quote from foible:
Going "short against the box" is illegal with equities because it is a form of tax fraud. The long position in the box would be held for more than 6 months and so would get a more favourable tax status, but by shorting the stock in another account (or purchasing a put), you have effectively sold. You may also be trying to defer the sale into another year if it will place you in a better tax bracket.
Because of the shorter terms on futures contracts, is this even an issue with futures?
It is perfectly legal to hold offsetting long and short positions, in the same instrument, in different accounts. The wash sale rule and other rules aim to prevent such strategies from obtaining a more favorable holding period or other tax advantage. Tax laws do not limit trading; they instead control how taxes are computed based on whatever trades have been done.
Sorry, i dont understand the thing with tax & "wash sale". maybe my english ist to bad...? The "wash trade" 2.) definition a undrstand, but not the "wash sale".Quote from jimrockford:
The wash sale rule and other rules aim to prevent such strategies from obtaining a more favorable holding period or other tax advantage. Tax laws do not limit trading; they instead control how taxes are computed based on whatever trades have been done.
Can someone do a view simple words more about "wash sale" concerning tax?
Quote from jimrockford:
Two "wash" definitions:
1.) A "wash sale", as defined by U.S. tax law, is the sale of a security within 30 days before or after the purchase of a substantially similar security. A "wash sale" is not illegal, though it does often receive a different tax treatment from other sales.
2.) A "wash trade", on the other hand, is a trade of shares in a security, in which the same party takes both sides of the trade.
Quote from twinx:
Can someone do a view simple words more about "wash sale" concerning tax?
See Publication 550 at www.irs.gov . It includes examples.
Can someone do a view simple words more about "wash sale" concerning tax?
See Publication 550 at www.irs.gov . It includes examples.
The example...
Quote from irs.gov: 1. Example
You buy 100 shares of X stock for $1,000. You sell these shares for $750 and within 30 days from the sale you buy 100 shares of the same stock for $800. Because you bought substantially identical stock, you cannot deduct your loss of $250 on the sale. However, you add the disallowed loss of $250 to the cost of the new stock, $800, to obtain your basis in the new stock, which is $1,050.
http://www.irs.gov/publications/p550/ch04.html#d0e12561