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Henry owned 100 shares of XYZ Corp. stock. Henry’s adjusted basis in the stock was $20/share....

Henry owned 100 shares of XYZ Corp. stock. Henry’s adjusted basis in the stock was $20/share. On Oct. 29, 2019, when the share price of XYZ Corp. dropped to $8/share, Henry sold all 100 shares. On Nov. 1, 2019, Henry purchased 100 shares of XYZ Corp. for $7/share. What is Henry’s recognized loss on the Oct. 29 sale of his 100 shares of XYZ Corp.?

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Answer #1

Realized loss = ($20 - $8) * 100 = $1,200

A wash sale loss exists when a stock or bond is sold for a loss and is repurchased within 30 days before or after the sale date. The loss may not be deducted, but is added to the basis of the repurchased asset.

Recognized loss = $0

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