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Old 03-15-2010, 11:40 AM   #21
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T-Al, don't forget to add that $222 to the basis of the those 10-odd shares for later use.
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Old 03-15-2010, 12:05 PM   #22
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So how does that work? Let's say I sell 100 shares this year, I will simply add $222 to the cost basis of all of those shares? Add a special Wash Sale carryover line?
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Old 03-15-2010, 12:59 PM   #23
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It works this way:

Since you have used average cost basis, you have to keep using average cost basis forever.

You have to trust Vanguard to include the extra $222 when calculating the average cost basis of your shares. I personally would not trust them.

If you had not been using average cost basis, then the specific shares that caused the wash sale now have a cost basis $222 higher than what you paid for them. So if the re-invested dividend was $1000 and was used to buy 10.419 shares of the fund, those specific 10.419 shares now have a cost basis of $1222.
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Old 03-15-2010, 02:05 PM   #24
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Alright, so I am trying to enter the wash sale the right way (as Al did in post #20).

I am using Turbo Tax Premier and I can't figure out how to enter line 2 (post#20), Wash sale.

I remember that last year, every time I entered an investment sale showing a loss, TT would ask me if I purchased identical shares during the wash sale window. This year, nothing. So, it looks like I have to do this manually. But how?
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Old 03-15-2010, 02:16 PM   #25
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Here are the instructions from TaxAct, which are pretty much the same as those that LOL gave (TaxAct doesn't allow copy/paste in their help -- you may need to click on them multiple times to make them readable):

WashSaleCalculationInstructions.jpg
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Old 03-15-2010, 02:26 PM   #26
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Quote:
Originally Posted by TromboneAl View Post
Here are the instructions from TaxAct, which are pretty much the same as those that LOL gave (TaxAct doesn't allow copy/paste in their help -- you may need to click on them multiple times to make them readable):

Attachment 8553
OK the TaxAct instructions are clear. And that's exactly what I did. So, as in your example above (post#20), I have line 1 and line 3. But it looks like TaxAct adds line #2 by itself when you mark the transaction as a wash sale. TT does not (TT Premier never even gives me the option to mark the transaction as a wash sale).

Edit: I figured it out.
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