1.Why do the wash sale rules apply to th sale of stock at a loss but not to the
ID: 2563909 • Letter: 1
Question
1.Why do the wash sale rules apply to th sale of stock at a loss but not to the sale of stock at a gain?2.Phong is a life insurance salesmen for Swan insurance and spends 4days a month in the office. His office is 12 miles from home. He also has a part time job as a salesman in a clothing store. Typically, he works 2 nights during the week and 1 day on the weekend. The clothing store where he works is 6 miles from his office and 7 miles from his home. What portion of phong’s travel is (are) considered business? 1.Why do the wash sale rules apply to th sale of stock at a loss but not to the sale of stock at a gain?
2.Phong is a life insurance salesmen for Swan insurance and spends 4days a month in the office. His office is 12 miles from home. He also has a part time job as a salesman in a clothing store. Typically, he works 2 nights during the week and 1 day on the weekend. The clothing store where he works is 6 miles from his office and 7 miles from his home. What portion of phong’s travel is (are) considered business?
2.Phong is a life insurance salesmen for Swan insurance and spends 4days a month in the office. His office is 12 miles from home. He also has a part time job as a salesman in a clothing store. Typically, he works 2 nights during the week and 1 day on the weekend. The clothing store where he works is 6 miles from his office and 7 miles from his home. What portion of phong’s travel is (are) considered business?
Explanation / Answer
The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss, and within 30 days before or after this sale, buys a “substantially identical” stock or security, or acquires a contract or option to do so. A wash sale also results if an individual sells a security, and the spouse or a company controlled by the individual buys a substantially equivalent security.
When the security is sold at a loss one can not ask for the tax deduction. That’s why it does not apply on gains
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