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Post by chang on Dec 11, 2023 17:56:45 GMT
I know that dividend reinvestment is considered a normal "buy" and can trigger a wash sale. In other words, if you own $10,000 of XYZ, and it pays a dividend of $500 which is automatically reinvested, if you sell within 30 days then your tax loss (if you have one) will be reduced by $500. However, I seem to think that if you sell the entire position of XYZ, then you will get the full tax loss with no reduction because of the purchase/sale within 30 days. Can someone ( yogibearbull!!) please confirm this?
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Post by yogibearbull on Dec 11, 2023 18:42:29 GMT
If you do a partial sale, there will be a wash sale due to the dividend and the disallowed amount is applied to the residual.
But if you sell the entire position, there is nothing left to apply the disallowed amount to. So, it just gets lost somewhere.
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Post by chang on Dec 11, 2023 18:59:34 GMT
yogibearbull - Just to be clear, if I sell the entire position, I will get the entire loss as a capital loss? With no impact from the recent dividend buy?
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Post by yogibearbull on Dec 11, 2023 20:00:33 GMT
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Post by chang on Dec 11, 2023 20:12:54 GMT
Thanks a lot, yogi.
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