Replies to post #15195 on Drinks Americas Holdings, Ltd. (DKAM)

[griff100]

jonny...the wash rule applies to buying shares 30 days before you sell aw well as after...

What's a 'wash sale'?
The IRS created the wash sale rule under Section 1091 to prevent investors from recognizing "artificial" losses by selling a stock for a loss, and then repurchasing the stock within a short period of time. The wash sale "window" starts 30 days prior to the sale, includes the date of sale, and ends 30 days after the sale - for a total of 61 days. If an investor sells the stock at a loss, and then repurchases the same stock within this 61-day window, the loss is deferred until the replacement shares are sold. The pro rata loss is added to the cost basis of the replacement shares purchased, and the holding period of the replacement shares includes the holding period of the original shares sold. However, the deferred loss will eventually be recognized when the replacement shares are sold. Note: Wash Sales can be avoided by waiting to repurchase replacement shares until after the 30-day window closes Wash sales are automatically tracked and updated in the TD AMERITRADE Gain Loss reports. Loss is deferred and added to the cost basis of the replacement shares, reducing Realized G/L and increasing Unrealized G/L. The opposite occurs when the replacement shares are sold and wash sales are reversed.