Does it make sense to sell my stocks and re-buy them?

[Kenji4861]

So I'm holding onto my stocks/mutual funds that are practically worth 50% from the time I bought it.

I don't think market will recover for a long time (next 3-5 years)

Does it make sense to sell and buy them again?

The reason is because, if I sell them, I can report it as a loss on my taxes for the next .. many years ($3000 max / year)

I don't know if this is a common practice.

 

[PepePeru]

isn't that a wash sale and illegal?

 

[snoopdoug1]

It is a wash sale if you rebuy within 30(or 31, can't remember) days from when you sold them. What you can do is sell them and buy something that is not "substantially identical" and then it's not a wash sale

 

[SandEagle]

http://www.fool.com/personal-f...thout-selling-low.aspx

 

[bondboy]

It's called tax loss harvesting and it's common.

You can't buy the same thing within 30 days or it's a wash sale. After 30 days, you're good, or if you don't want to wait buy something similar but different.

 

[darkxshade]

I don't think wash sales in itself is illegal, it's illegal to report it as a loss. If the OP pays someone to do his taxes for him or if he uses his brokerages statement, there's going to be adjustments made to calculate the real loss excluding wash sales. If the OP does his own taxes then, expect to be audited and thoroughly owned by the IRS.

 

[ponyo]

Originally posted by: G Wizard
isn't that a wash sale and illegal?

why would it be illegal? Wash rule is for 30 days. Even if you rebuy before the 30 days is up, you simply adjust the cost basis on your new shares.

 

[TuxDave]

I'll just jump on the bandwagon. If you have a loss on stocks, you can sell it but do NOT rebuy it within 30days if you're expecting to write it off as a loss for your taxes.

 

[Cattlegod]

So something like selling pepsi and buying coke is fine though?