Deductible Capital Loss on Conversion
I have a tax client that has personal investments in a specific Mutual Fund with Vanguard. He also has a Roth IRA in the same specific Mutal Fund with Vanguard.
The client sold $5,000 of his personal Vangurd Mutual Fund and immediately invested the $5,000 into the same specific Vanguard Mutual Fund in his Roth IRA account.
The $5,000 sale of his personal mutual fund investment resulted in a $1,500 loss.
Is the $1,500 loss on his personal investment account deductible or do wash sale rules apply?
Thank you in advance for your insight.
Permalink Submitted by Alan Spross on Wed, 2008-07-09 23:07
The IRS left this issue hanging for years, but early this year ruled that such a transaction does trigger the wash sale rules.
http://www.irs.gov/pub/irs-drop/rr-08-05.pdf
Permalink Submitted by PAUL HAGGERTY on Thu, 2008-07-10 12:43
Thanks for your help.
Permalink Submitted by PAUL HAGGERTY on Thu, 2008-07-10 12:45
[quote=”[email protected]“]The IRS left this issue hanging for years, but early this year ruled that such a transaction does trigger the wash sale rules.
http://www.irs.gov/pub/irs-drop/rr-08-05.pdf%5B/quote%5D
Thanks for your help.