is this legal?

C

ck9

hi,

me and a friend have a longterm position in a small cap nasdaq stock which has very low volume. it would be impossible to sell and buy it back without incuring huge slippage. we would like to take the loss for tax reason and buy it back immediately.
would it be legal to trade with each other?

thanks alot for your input!

regards
 
You can trade with each other all you want. But you are talking about a wash sale and that won't help you with taxes. From the IRS point of view, if you sell a stock at a loss and then by it back immediately, you did not sell it, so you can't claim the loss.
 
thanks for your replies
we are located in germany. not long ago there was case where a trader did sell a stock and bought it back immediatley. the german irs lost the case in court.

i don´t know if i remember it correctley but i thougt that i read it on elitetrader many years ago that your order needs to be on the level 2 for 15minutes or something like that if the trade is prearranged.
 
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