I would like to time the stock market but I am concerned about the WASH-SALES rule. What aretax implications?

I would use Rydex funds. Due to the WASH-SALES rule, is it only advantageous with retirement funds or can it work with non-retirement funds?





Thank you very much!I would like to time the stock market but I am concerned about the WASH-SALES rule. What aretax implications?
%26lt;%26lt;%26lt;I would like to time the stock market but I am concerned about the WASH-SALES rule. What aretax implications?%26gt;%26gt;%26gt;





The first two answers you got indicated you lost the tax benefit associated with selling for a loss with a wash sale. That is incorrect. You postpone the tax benefit instead of losing it.





For details on the tax implications see





http://www.fairmark.com/capgain/wash/ind鈥?/a>





%26lt;%26lt;%26lt;I would use Rydex funds. Due to the WASH-SALES rule, is it only advantageous with retirement funds or can it work with non-retirement funds?%26gt;%26gt;%26gt;





It can work with non-retirement funds, assuming you are a good enough trader to time the stock market correctly. Timing the market is harder than you might expect.I would like to time the stock market but I am concerned about the WASH-SALES rule. What aretax implications?
The way wash sales work, if you purchase a stock within 30 days of selling it, the loss is added to the basis of the new purchase as opposed to being recognized on taxes. So if you buy 1 share of XYZ for $100 and sell it for $90, you have a $10 loss. If you buy it back again 20 days later for $85, then you don't get the loss...but your basis for the new purchase is $95 (the $85, plus the $10 loss). If you then sell it for $100, you pay taxes on only $5 of gain ($100 less $95 basis). So between the two trades, you had a $10 loss and a $15 gain. You also got taxed only on $5 of gain, so between the two trades, it worked out the same as if the wash sale rule hadn't been there (although you may have gotten the offset in a different tax year). So long as you eventually offset your losses with gains, it works out the same in the long run. If you keep running up losses, then you aren't going to unlock the losses until you let 31 days pass.





If the track record of the timing system you are using is good enough, I wouldn't worry about wash sales. It's a very small factor in the scheme of things.
In non-retirement accounts plan ahead and finish up in October so you can switch to a different fund for the last 2 months of trading.
In an IRA wash sales don't apply since you don't take a tax loss on the sale.





In a non IRA account, if you make a profit, you can buy again without any consequences. You didn't take a loss, so the wash sale doesn't apply.





In a non IRA if you take a loss on a sale, don't buy that stock again for 31 days. If you do, you don't get the tax loss on the first sale. You can buy it back it back, if you think it's worth it to ignore the tax loss.
I'm not sure I understand what you would like to do, but the WASH-SALES rule only means that you cannot sell a stock, or fund, for a loss and buy it back in less then 30 days and claim that investment as a loss on your taxes.





I don't know how the rule is advantageous in any scenario, IRA or not. check out the link...