Re: Q: Handling Basis Adjustments Resulting from Wash Sales
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Posted by Sam C. on January 09, 2000 at 20:55:21:
In Reply to: Re: Q: Handling Basis Adjustments Resulting from Wash Sales posted by Mark on January 07, 2000 at 20:14:22:
: : What's the accurate way to adjust your basis as a result of a wash sale
: : in FM? I sold some shares of a fund at a small loss within 30 days of
: : making a purchase. Also, a few weeks later, I reinvested a distribution
: : in the same fund, requiring another basis adjustment. I know how much to
: : adjust the base; I just don't know how to record it in FM or what date I
: : should assign the transaction. Any suggestions would be appreciated. : : Thanks,
: : Sam C. : Hi Sam C.
: There are three things that affect your cost basis: : 1) The purchase cost
: 2) Account Fee Distributions
: 3) Return of Capital Distributions : Account fees increase your basis, while a return of capital distribution
: decreases your cost basis. : Reinvested distributions, are treated as a distribution, and a purchase.
: So, if the distribution is not one of the account fee or return of cap. types,
: it won't affect the basis, but the purchase involved in the reinvestment
: will increase your basis, for when you sell those re-purchased shares. : Thanks,
: Mark
: --
: Mark Beiley Hi Mark,
Thanks for the response. I may not have asked my question clearly. It's my
understanding (and illustrated very well at the fairmark web site
[http://www.fairmark.com/capgain/ws101.htm is the specific link]) that any
capital loss disallowed as a result of a wash sale is added to the basis of the
replacement shares. This allows you to "realize the loss" when you sell the
replacement shares at a later date. So, is there a way in FM to "adjust the
basis" of the replacement shares to reflect the consequences of the wash sale? Thanks again,
Sam C.
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