stock sale and repurchase
I am retired and my income only comes from my RMDs and dividends. A stock I have owned for awhile dropped because of a poor quarter. I would like to sell most of this stock for a tax loss. Because I like this stock, I would like to purchase it back after the first of the year. Would this cause any problems with the IRS?
Terry Says
You have to be very careful to avoid the “wash sale” rule, which would disallow your loss if you buy the stock back to soon. That period used to be 30 days, and now is 61 days. And a lot could happen to the stock in that period. Since you can only deduct $3,000 of capital loss against ordinary income in one year (or all of the loss against any realized capital gains), does it make sense to give up a stock that you basically like?
Only YOU can make that decision.
BUT — to read more about the “wash sale” rule, read this article at Fidelity.
