sale of xyz stock in ira, Purchase of stock xyz, in taxable account, wash?

I want to take an ira distribution at the beginning of the year, will I have to wait 30 days to buy stock in the same company but in a taxable account. (ie xom)

Reply to
oldcodger
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No. There are no capital losses or gains in a tax-deferred account, so there's no wash sale possible there (assuming you're selling the stock at a loss in the first place).

There have been disagreements about the opposite type of transaction: selling at a loss in a taxable account, then repurchasing it in an IRA.

BTW, the wash sale rule doesn't say that you can't purchase the same stock within 30 days. It just says that if you had a loss on the sale, you can't realize it immediately -- you add the unrealized loss to the cost basis of the replacement shares. When you eventually sell those shares, the stepped-up basis will cause your capital gain to be lower (or capital loss greater) by the same amount that you couldn't realize during this sale.

Reply to
Barry Margolin

See this revenue ruling. It would seem the disagreements are pretty much resolved.

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But as you noted, there's no gain or loss in an IRA. Nor does the XYZ stock purchasedoin an IRA have basis. (Basis in an IRA refers to the unrecovered nondeductible contributions.)

So if you generate a wash sale through sale outside an IRA and purchase in an IRA, there's no way to recover.

Reply to
Arthur Kamlet

I just want to make sure you understand what Barry & Arthur told you. Your sale of securities inside your IRA does not generate a gain or loss. You just have a distribution subject to tax at ordinary rates. You can buy the same securities in a taxable account any time you want.

The rest of their discussion dealt with someone who sells securities at a loss in a taxable account and then within +/- 30 days buys back those same securities in a tax-deferred retirement account. The referenced IRS revenue ruling says that this is equivalent to a wash sale that disallows the taxable loss. Arthur points out that it is even worse than a typical wash sale in that you are left with no loss to deduct and no adjustment to basis for the shares you purchased inside your retirement account.

Reply to
Alan

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