Wash sale with unequal quantities

Feb 29, 2020 Last reply: 6 years ago 2 Replies

So far every example I've seen is of buying 1000 shares of XYZ after selling _the_same_number_ of shares of XYZ at a loss



Scenario:



  1. Sell 1000 shares of XYZ at a long-term loss of a share.
  2. Dividend reinvestment program buys 2.61 shares, creating a wash sale.

Are 2.61 shares considered a wash sale, or 1000 shares?



Do I lose the tax benefit of the full $1000 loss, or do I just lose the benefit of $2.61 of the loss, and can still use the other $997.39 of the loss to offset long-term capital gains for trades in other securities?



(It really seems, in justice, that DRIPs ought not to trigger the wash-sale rules, but I understand we have to deal with what is, not with what should be.)


You lose (for now) $2.61 of the loss. The other $997.39 is recognized on your current year's tax return.

Ira Smilovitz, EA Leonia, NJ

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