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Stock "washing"

Discussion in 'Other Off Topic Forum' started by androza, Feb 16, 2004.

  1. androza

    androza Karting

    Nov 4, 2003
    86
    I have some questions about stock washing. One person said that its when someone buys stock, said stock drops, person sells stock, buys it back, then writes the loss off on their taxes. Someone else told me that it refers to buying a stable stock, buying the stocks on the troughs and selling on the crests over and over. I'm mainly going to be dealing with the second one, and want to know if there are any special circumstances I should be aware of.
     
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  3. DrStranglove

    DrStranglove FChat Assassin
    Rossa Subscribed Owner

    Oct 31, 2003
    25,735
    Google Maps
    Full Name:
    DrS
    That sounds a lot like a "step transaction" to me.


    DrS
     
  4. Horsefly

    Horsefly F1 Veteran

    May 14, 2002
    6,929
    Let me use a visual aid. THIS, is stockwashing!
     
  5. BigTex

    BigTex Seven Time F1 World Champ
    Rossa Subscribed Owner

    Dec 6, 2002
    74,351
    Houston, Texas
    Full Name:
    Bubba
    Gimme 1,000 shares! LOL
     
  6. BigTex

    BigTex Seven Time F1 World Champ
    Rossa Subscribed Owner

    Dec 6, 2002
    74,351
    Houston, Texas
    Full Name:
    Bubba
    ..... and the matching luggage set, out of that wreck!
     
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  8. Chiaro_Slag

    Chiaro_Slag F1 Veteran

    Oct 31, 2003
    7,731
    CA
    Full Name:
    Jerry
    A wash sale is for year end losses - It prevents you from writing off the losses on your taxes.

    For example, you are down 2K on a stock & want to claim the stock loss at year end. If you sell the stock on Dec 31, 2003 and re-buy the same stock within 30 days, you are not suppossed to claim the loss on your 2003 tax return.
     
  9. BubblesQuah

    BubblesQuah F1 World Champ
    Silver Subscribed

    Nov 1, 2003
    12,077
    Charlotte
    There is going to be a live discussion of the wash sale rule - Thursday on EliteTrader. The chats there are usually pretty good - check this link for more info:

    http://www.elitetrader.com/ch/
     
  10. tifosi69

    tifosi69 Formula 3

    Dec 23, 2003
    1,671
    Atlanta, Ga.
    Full Name:
    Al-Al Cool J
    I would DROP the soap in that instance !!!
     
  11. androza

    androza Karting

    Nov 4, 2003
    86
    Is there anything I should know about step transactions, such as extra taxes?
     
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