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Taxes, Selling Shares, Share Purchase Plans and Wash Sales

Newbie

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Replies 1

I have a question regarding what constitutes a wash sale.

In this example, I have a bunch of shares that I have purchased at a high price that has since lost a lot of value. During this time, the company has offered a SPP at an attractive discounted rate that I participated in to lower my average holding with the intention of selling my entire position in order to get close to break-even. I will not receive these new shares for another week or so but I have already calculated what they’ll be worth.

If I were to preemptively sell my current shares at a capital loss, acquire the new ones and sell them for a profit, and end up even or thereabouts, how should I treat this at tax time? Do I claim that first loss and claim the second gain? Do I ignore the losses but tax the gains? I have no intention of trying to dodge taxes, just want some clarity of what is allowed and what is not.
1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @Dizza

 

As your dealing with CGT assets in shares it all gets calculated together anyway. So losses in one area can be applied to gains in another so hopefully your final net outcome for the year will be a gain. If not, a loss will carry forward for you applied against any other CGT gains in the next year. See Making capital gains and capital losses for more detailed information.

1 REPLY 1

Most helpful response

ATO Community Support

Replies 0

Hi @Dizza

 

As your dealing with CGT assets in shares it all gets calculated together anyway. So losses in one area can be applied to gains in another so hopefully your final net outcome for the year will be a gain. If not, a loss will carry forward for you applied against any other CGT gains in the next year. See Making capital gains and capital losses for more detailed information.