Does the Wash Sale rules apply if replacement shares are purchased in an IRA account?

If I sell shares out of my brokerage account, and buy identical shares in my IRA account within 30 days, will I be able to deduct the loss that occured from the sale of the shares in my brokerage account? I can't seem to find a defnitive authoritative answer on the web. Any experts or people who have had a professional answer this please respond.Does the Wash Sale rules apply if replacement shares are purchased in an IRA account?
Technically the answer is NO!





But IRA transactions do NOT get reported to the IRS, so your chance of getting caught is miniscule... unless you got flagged for other reasons or extremely abused the rule in some way. There are some ways to abuse this rule in the extremes which I shall not discuss.





The IRS has never published a direct answer to this topic either ... bunch of schmucks.Does the Wash Sale rules apply if replacement shares are purchased in an IRA account?
Okay. Let me breakdown the Wash-Sale Rule from our bestest friends in the whole world, the IRS.





The Wash-Sale Rule states that someone is PROHIBITED from claiming a loss on the sale of an investment when the same investment was purchased within 30 days before or after the sale date.


Just because you sold it from one account and purchased it into another does NOT evade this rule...unless you are the Custodian of a Trust, with the Trust not in any way being in your name.





Hope this helped.


Sorry the IRS can be such a pain in the @$$
No, take the loss ( on your taxes)...if you simply HAVE to buy something in the IRA, just buy a similar stock...then wait 31 days...sell it ( up a little I hope ) and buy the one you really wanted. No rules broken, results should be fairly similar...everyone's happy.
No. Absolutely not. Look at it as a bucket of apples and a bucket of oranges. You can only offset losses and gains in taxable accounts to losses and gains in other taxable accounts. You NEVER pay cap gains (short term or longterm) in your IRA so to compare is a moot point. You only pay ordinary income on any Withdrawals from an IRA upon distribution (assuming you're over 59.5 and don't incur add'l penalties).
I think the short answer is YES. My understanding of the wash sale rule is that you cannot claim the loss if you acquire a substantially similar position in the stock with 30 days on either side of the sale that generated the loss in ANY account that you OR A CLOSE FAMILY MEMBER (i.e. spouse, dependent child, etc.) control. (I don't think that part is technically part of the wash-sale rule, but it still excludes you from claiming the loss.)





If that understanding is correct, it would be a very bad move to repurchase the shares in the IRA because then you would NEVER be able to claim the loss. You wouldn't be able to do it now because of the wash sale rules and you wouldn't be able to do it when you sell the shares in the IRA since the IRA is a tax-deferred account.





Will the IRS know if you repurchase the shares in an IRA? I don't know, but I personally would not try to get away with it.





My preferred method of taking a loss on a stock while still maintaining a position in it is usually to double my holdings when I think the stock has reached a short-term low, then wait at least 31 days and sell the original shares. That allows me to take the loss and end up with the same number of shares without violating the wash-sale rules. Of course, I do have double the risk if the stock dives during the time I have the doubled position, but if I think the stock will rise again, I'd prefer to take that risk than risk having it make a rapid rise while I'm waiting 31 days after a sale for the wash-sale clock to run out.





Of course, it's much too late in the year to do that kind of thing now for 2007, but it's something to keep in mind in future years (and start planning for in September or October of each year).





If you can find a similar stock (e.g. different company of equal quality in the same industry), you can buy that in any account you want to without triggering a wash-sale. You just can't buy the exact same stock.
No. Any profits or loss's are tabulated when you start to withdraw your IRA.





Don't make any sense to me to sell outside the IRA, and then purchase them again in an IRA. Whats the motive?





If you looking to claim a loss from buying and selling shares in your brokerage account, you can do that without getting involved in an IRA.





I don't think the IRA custodian notifies the IRS of any buying or selling within your IRA account. Only thing the IRS is concerned with is how much you put in on an annual basis, and how much you take out.





If you purchase 10,000 woth of stock in an ira, and when you get ready to retire, and if the value is 75,000, and you close your IRA, you can not deduct trhe 25,000 loss.
The quick answer is no. Here's what I found online:





The wash sale rule and the rule for sales to related parties work together for a single purpose: to prevent you from claiming a loss deduction while maintaining uninterrupted ownership of your stock. If you aren't willing to part with the stock, you aren't eligible for the deduction. Buying replacement shares in an IRA is a gimmick designed to defeat the basic purpose of these provisions. It shouldn't work, and if the IRS position in Publication 550 is upheld, it won't.





Good Luck