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Re: Wash sales

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Posted by Mark on January 06, 2001 at 10:56:14:

In Reply to: Re: Wash sales posted by George Timms on January 06, 2001 at 10:01:28:

: : The IRS disallows the loss on a sale if you purchase "substantially identical" securities within 30 days (before or after) the sale. I sold some mutual fund shares this year at a loss, with a small fraction of those shares subject to wash sale rules (because of dividend reinvestment in the month before the sale).

: : FM 4.7 doesn't seem to have any provision for wash sales on the Captial Gains reports. Is this added in FM 5.0?

: : I got FM 4.7 to compute the allowable and disallowed loss by breaking the sale into two transactions (one for the shares with allowable loss, and another with the number of shares for which the loss is not allowed), but I had to "fudge" the date on one transaction to make FM compute the loss on the correct shares for the wash sale (using FIFO rules). Is there a better way to handle this?

: Also, to account for the fact that the IRS allows me to increase my basis in wash-sale shares by the disallowed loss amount, I had to modify the purchase transaction. FM doesn't let me enter this as a commision/fee in a no-load fund, so I had to modify the cost value (leaving a memo in the transaction about this "fudge"). Is there another/better way to show increased basis for wash-sale shares?

Hello George,
FM does not have special provisions for wash sales. This has not been added
into 5.0 either. There are a couple options for recording your wash-sale
shares with the increase in basis. You could record the shares with a
commission fee to increase the basis. Even for a no-load fund you can
do this. Go to "Investment Properties.../Other" and choose the "Commission/
Fee" transaction entry preference. The other option
is to use an "Account Fee". This will increase your basis by the amount
of the fee.

Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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