Wash Sales

[S T]

To calculate Wash Sale loss. should you use first in/first out or average share price

Example:
10 shares purchased 6/10/08 @ $20 per share and another
10 shares purchased 8/10/08 @ $15 per share

20 Shares sold on 11/21/08 @ $5 per share

Loss is $250 part of which would be allocated as wash sale and part as allocated for allowed loss on 5 shares

FIFO would yield $200 wash loss and $50 loss on 5 shares
Average would yield $187.50 wash loss and $62.50 on 5 shares

15 Shares Repurchased on 12/1/08 @ $7

Thanks

Sandy

[BHoffman]

Hi Sandy - I'm 99% sure that average price per share is used for mutual fund redemptions, and FIFO is used for securities. So, I'd use FIFO.

[erchess]

Agree

with BHoffman - no surprise when she's right as I believe she is in this case.

With Mutual Funds you may but need not use average cost. You may also use any of the methods that are allowed for stocks, which are lifo, fifo, and specific identification. Whatever is done the first time a given security is sold should be done thereafter unless of course someone sells their last share of something then buys it again without triggering a wash sale.

I personally use fifo for stocks and average for funds unless I have knowledge that otherwise has been done before my time.

[S T]

Thanks

Thanks for the info and confirmation.

That is what I thought FIFO-however, the broker is showing Average on his worksheet.

Sandy