Housing direction

[ucodegen]

You still end up owning the exact same number of shares but get to deduct the loss based on your higher cost. Socialize losses, privatize profits.

Not exactly accurate. You are not “socializing losses and privatizing profits“. You are taxed on any net gain. In deducting the loss, you are reducing the effective basis, should you pick up the same stock issue after wash date. With the reduced basis, you have the potential of a larger gain that you will be taxed at.

For example:
Buy stock A 1000sh @ $11/sh – cost $500
Stock A tanks, to $0.50/sh – current value $500, paid $11,000
Sell A, take loss of $10,500.
Wait 31 days.
Buy back 1000 sh of A at $0.50 – cost $500.
Stock A goes back to $11/sh and you sell – $11,000
After selling, you have a gain of $10,500 – which is precisely offset by your loss of the same amount. Net taxable for the whole thing is $0 – which would be the same result as if you just held the stock over the whole period and sold when it got back to $11/sh.

[carlsbadworker]

[quote=HLS]There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
[/quote]

More than one hundred years ago, John Stuart Mills observed: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal in hopelessly unproductive works.”
In that regard, there will be a hefty long term cost to save the reckless and incompetent. The government is not just delaying the inevitable, it is in fact exacerbating the ultimate damage by throwing good money into very unproductive uses.

[carlsbadworker]

[quote=HLS]There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
[/quote]

More than one hundred years ago, John Stuart Mills observed: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal in hopelessly unproductive works.”
In that regard, there will be a hefty long term cost to save the reckless and incompetent. The government is not just delaying the inevitable, it is in fact exacerbating the ultimate damage by throwing good money into very unproductive uses.

[carlsbadworker]

[quote=HLS]There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
[/quote]

More than one hundred years ago, John Stuart Mills observed: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal in hopelessly unproductive works.”
In that regard, there will be a hefty long term cost to save the reckless and incompetent. The government is not just delaying the inevitable, it is in fact exacerbating the ultimate damage by throwing good money into very unproductive uses.

[carlsbadworker]

[quote=HLS]There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
[/quote]

More than one hundred years ago, John Stuart Mills observed: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal in hopelessly unproductive works.”
In that regard, there will be a hefty long term cost to save the reckless and incompetent. The government is not just delaying the inevitable, it is in fact exacerbating the ultimate damage by throwing good money into very unproductive uses.

[carlsbadworker]

[quote=HLS]There are still people hanging on to what they bought at an inflated price but don’t want to sell because they don’t want to lose money. Sound familiar ?
Sadly for them, they don’t even know what the wash rule is and that the govt will share in their loss.
[/quote]

More than one hundred years ago, John Stuart Mills observed: “Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal in hopelessly unproductive works.”
In that regard, there will be a hefty long term cost to save the reckless and incompetent. The government is not just delaying the inevitable, it is in fact exacerbating the ultimate damage by throwing good money into very unproductive uses.

[Author]

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