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Schorsch(Enthusiast)Enthusiast
23 Feb 2024

Say I'm selling my shares of company X on May 1st, because I'm generally concerned about the prospects of the company. I realise a loss as a result. Then the economics of the company improve, so I decide to buy back my shares on August 15th same year, so 3.5 months after.

Would this be classified as a wash sale? If so, would it come with penalties? Or would the buy and sell transactions merely be considered as never happened, so I would still keep my original unrealised loss?

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1,433 views
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Bruce4Tax(Taxicorn)Taxicorn
24 Feb 2024

The relevant ruling only refers to buying back in a "short period of time."


"Short" is not defined - but I would have thought 3 months would be safe, especially if you can demonstrate that there was no plan to wash.


If in doubt, apply for a private ruling.


https://www.ato.gov.au/law/view/pdf/pbr/tr2008-001.pdf



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