Wash Sale Rules for active traders


V

Vin Miller

I'm an active trader, but part-time, and I have a question
about wash rules. I generally get the idea of wash rules,
and I have reviewed several IRS docs, but I wanted to see if
I am understanding something correctly....

It seems to me wash sales only matter if you hold a position
over two separate calendar years, OR if you re-enter the
equity within 31 days of the sale and this re-entry is in a
second calendar year. Is this correct? It may be better to
provide examples:

-- If you buy ABC in July and sell in August for a gain;
then buy ABC in August and sell in September for a loss; and
then buy ABC in September and sell in October for a gain...
and don't re-enter again during the year, then it all nets
out on the Schedule D and no wash rule applies.

-- HOWEVER, if you buy ABC in October and sell in November
for a gain; then buy ABC in November and sell in December
for a loss; and then buy ABC in December and sell in January
for a gain... then, wash sales apply because you held the
stock over two calendar years.

-- ALSO, if you buy ABC in October and sell in November for
a gain; then buy ABC in November and sell on December 15 for
a loss; and then buy ABC on January 7 and sell in February
for a gain... then, wash sales apply although you were out
of the stock at the end of the year, you re-entered that
stock within 13 days when you got back in on January 7.

Are these examples correct? Thanks in advance for any input.
 
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