Case Study 47: Wash Sales

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Introduction
The purpose of this posting is to demonstrate the effect of the wash rules on securities purchased 30 days before/after the sale of the same (or substantially similar) security for a loss.

Problem
Taxpayer A has 2 investments:

1. 20 shares of Apple stock purchased on 1/17/2018 for $179.10 per share; and
2. 2 Bitcoins purchased on 1/17/2018 for $11,431.10 per coin.

On February 5, Taxpayer A panics at the sight of a dip in the stock/cryptocurrency markets and sells both investments for $162.71 a share and $8,270.54 a coin, respectively. Believing that the markets reached their bottoms, Taxpayer A decides to buy back in at $155.15 a share and $7,637.86 a coin, respectively.

Solution
Apple Stock

Bitcoin

References
https://steemit.com/tax/@alhofmeister/wash-sale-rules-cryptocurrency-application

Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.