Wash Sales (again)

[paulk]

Mark

So I'm trying diligently to reconcile my FM basis to the basis carried by TD Ameritrade (and reported to IRS). I'm having problems with the wash sale feature. It works perfectly in PM . However, TD Ameritrade only applies the feature to taxable accounts whereas I think FM applies it to all accounts (taxable and tax deferred). Is there a way to apply the feature to specific accounts rather than enabling it across the board? If not can you think of any workaround I can use to get that result?

Paul K

[Mark]

Hi Paul,

Do you mean you want to use wash sale rules for only some accounts, and not others? Unfortunately, you cannot do this in Fund Manager. One work-around would be to do all your taxable accounts with the option on, and then do all your tax-free accounts with the option off.

[paulk]

Ok. Then if I use the workaround you suggest (turning the option off to process sales in my nontaxable accounts and turning it back on to process the sales in taxable accounts) will my computed basis stay adjusted for the wash slae in the taxable accounts even after I turn the wash sale option back off?I don't know if it's feasible to add a wash sale option by account in a future version but it would be hugely helpful to me.

Just thinking about this further Mark - is it possible to adjust the basis of an investment in FM to account for the wash sale that I want to remove? In other words can I leave the wash sale option enabled, have FM compute the adjustment for all accounts and somehow adjust the basis of the security in question to remove the effect of the computed wash sale adjustment?

BTW I did download the 10.9 pre release. seems to be working fine thanks.

[Mark]

Hi Paul,

Your cost basis is calculated using whatever settings are set when you create the report showing your cost basis. If you look at the basis when the option is off, and then on, they may be different, but when you turn it back off again, it will go back to the value when the option is off. It isn't as confusing as I just made it sound. They key is whatever the options are at the time you create the report determine how the information is calculated. Turning the wash sale rule option on/off does not affect any recorded data for your investments, it just controls how calculations are done.

Thanks for the idea of adding a wash sale option by sub-portfolio.

The tax cost basis is affected by the cost of your recorded buys, sells, and transfers, as well as any "Return of Capital" distributions. When you have a RofC distribution, the cost basis is lowered by the amount of this distribution.