posted
I dont understand how this law that states you can not buy the same stock within 30 days of when you sold it. A lot of people seem to enter and leave the same stocks a lot during the course of the same month, so how does this law work?
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posted
so this only applies for the end of the year. I can buy shares of one stock while its up, then sell, then wait for 2 days and buy it when its low, then sell when its high again....and so forth, as much as i want without facing any penalites, right?
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posted
I believe it's called the "wash" law and if I'm not mistaken, they are trying to take it off the books. I'll do some more research on that but here is an example of what I am talking about.
Lets say you bought a stock and then sold it for a loss of $100. You then reentered the stock within 30 days and made a profit of $200. Essentially you are $100 richer but the laws says since you were within the 30 day window, you have to pay taxes on the $200 but you can't write off the $100. If you do it outside of 30 days, you are allowed to write off the $100 and then pay taxes on the $200.
If I'm wrong, please call me on this and kindly explain.
What the tax rule or law is trying to say is that if you want to have the benifit for taxes of a gain or lose you must not re-buy the same identical position again for 30 days in order to claim the lose or gain in the period.
If you re-buy the issue within the 30 days it is a wash and should be treated as you never sold it in the tax period.
Folks should realy ask an accountant though. I am no accountant.
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posted
This is probably one of those questions that you guys would look at and say "holy crap, why is this guy investing if he doesnt know this!?" but im gonna ask it anyway.....how do taxes on stocks work?
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posted
Actually, now that i realized how little i know, i was wondering if there are any books i could read on stocks, technical analysis, picking the right stocks, etc.? Thanks!
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