You are misinterpreting the ‘wash-sale’ rules.
They are a heads, IRS wins, tails, you lose situation.
If a sale results in a profit, you have to report it and pay taxes, regardless of when you buy back replacement stock.
If you lose money when you sell a stock – BUT you bought identical stock w/I +/- 30 days, you cannot deduct the loss. Said loss is added to the basis and ‘used’ when you sell the ‘replacement’ stock. (Actually, this is considered to be an ‘audit’ issue by many investors. Why worry about it? It should not make much difference on your tax return. If you have a wash sale, AND the IRS catches you, BUT you have already disposed of the replacement stock, you will be all right. Even if you sold the replacement stock in the next tax year – the auditor will not open up the second year. He has to give you credit if he disallows the wash sale stock. It’s not worth the hassle.)
OTOH, if you have thousands (millions?) of shares of Enron and decide to sell it on Dec 25th and take the deduction, then get worried that they are going to bounce back on Jan 15th and replace your shares, you deserve to get hit w/a wash-sale disallowance.
From: OptionClub@yahoogro
Sent: Monday, June 14, 2010 6:23 PM
To: OptionClub@yahoogro
Subject: Re: [TheOptionClub.
There is no point selling covered calls otm. You might as well sell the atm for max premium. If you get called-out, just re-buy the stock. You have 30 days under IRS rules to rebuy the same asset for a wash sale, meaning no tax is due on the assignment. If it's in your IRA then it's not taxable anyways. So don't be scared of being called-out.
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