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Stephanie B.
Stephanie B., Enrolled Agent
Category: Tax
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Experience:  MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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Matthew sold 200 shares of Xerox stock on December 23, 2008.

Resolved Question:

Matthew sold 200 shares of Xerox stock on December 23, 2008. The stock had a basis $4000 and was sold for $2100. When Matthew funds his IRA on January 3, 2009, he causes the IRA to purchase 400 shares of Xerox for $4000. Can Matthew deduct the loss on the sale of the Xerox stock?
Submitted: 1 year ago.
Category: Tax
Expert:  Stephanie B. replied 1 year ago.

Stephanie B. :

Thank you for your question.

According to Rev Ruling 2008-05, the loss of the sale of stock would be dissallowed under IRC Section 1091, which is the wash sale rules. An IRA is considered a related party.

http://www.irs.gov/pub/irs-drop/rr-08-05.pdf

If you need further clarification, please let me know.

I look forward to your response.

Stephanie

Stephanie B., Enrolled Agent
Category: Tax
Satisfied Customers: 555
Experience: MTax, EA, QuickBooks Proadvisor. Over 10 years accounting and tax experience specializing in individual and small business.
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