Wash Sale Comment/Question

[ownyourfuture]

I sold ConAgra shares at a loss on December 14th. That same day, I bought shares of McCormick & Company. A couple days later, I remembered that after I had completed the McCormick & Company transaction, I saw a W next to the MKC holdings. It may have been in red, I can't remember for sure.

“The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss &, within 30 days before or after this sale, buys a “substantially identical” stock or security”

The W is no longer showing next to the shares. I called Fidelity last Friday, & the rep told me there was no wash sale infraction. I'm guessing/hoping that Fidelity shows that W next to a symbol when it’s a stock that the IRS ‘might’ consider ‘substantially identical’

My question involves the same transaction. I sold the ConAgra shares on December 14, if I'm figuring it right, today would be 31 days, & if I chose to, I could purchase new shares without triggering a wash sale. However, the last ‘fractional share’ of CAG wasn't credited to my account until December 18th

‘If’ I bought shares today, would I be OK, or do I have to wait until December 18 ?

For anyone who may be interested. CAG stock has been totally annihilated over the past three months, it's trading at a 22 year low. I 'thought' I had learned my lessons about the dangers of trying to catch a falling knife a long time ago, I still have scars

But this one looks to be extremely oversold (famous last words)

 

[kaneohe]

I............................ However, the last ‘fractional share’ of CAG wasn't credited to my account until December 18th

‘If’ I bought shares today, would I be OK, or do I have to wait until December 18 ?

.........................................

Is this a reinvestment? If so, you would still have a wash sale.....but it would only be partial to the extent of the reinvestment shares.(assuming you are counting the 31 days correctly).

 

[audreyh1]

No, ConAgra and McCormick would not fall under substantially identical stocks as they are two different companies.

 

[ownyourfuture]

Is this a reinvestment? If so, you would still have a wash sale.....but it would only be partial to the extent of the reinvestment shares.(assuming you are counting the 31 days correctly).

If by reinvestment, you mean a dividend reinvestment, the answer is no.
The last dividend was paid on 11/30/2018
I sold all shares on December 14th

 

[RunningBum]

If by reinvestment, you mean a dividend reinvestment, the answer is no.
The last dividend was paid on 11/30/2018
I sold all shares on December 14th

You said

However, the last ‘fractional share’ of CAG wasn't credited to my account until December 18th

Are we supposed to guess what that means?

If they sold full shares one day and fractional another, the 30 (not 31) days apply separately to each.

 

[kaneohe]

You said

Are we supposed to guess what that means?

If they sold full shares one day and fractional another, the 30 (not 31) days apply separately to each.

OP's post was a bit confusing to me too...........credit to acct sounded like a reinvestment........more normal to use debit to mean a sale. Perhaps is using 31 to mean the safe period......I always get nervous when cutting it that close.

 

[youbet]

‘If’ I bought shares today, would I be OK, or do I have to wait until December 18 ?

With Schwab, if I have a close call like this I just pick up the phone and ask them. They tell me on the spot if it will be a wash sale or not. I'm sure Fidelity would/could do the same.

 

[RunningBum]

Yes, 31 days safe, 30 not, sorry for being snippy about that. OP was using it correctly.

 

[bingybear]

If I understand your question, it really doesn't make a big difference.
If you do buy and have less than 1 share in a was sale, the amount is likely insignificant. Yes you or your broker will have to track that, but the amount in dollars of wash sale is likely very small.

Which broker are you using? I use 2, one sells the factional shares the same day, the other I think sells them later similar to how you describe. Call you broker and see how they are recorded (same date or different date.) It may depend on your specific broker/sale.

But the wash sale amount is likely small

 

[bingybear]

With Schwab, if I have a close call like this I just pick up the phone and ask them. They tell me on the spot if it will be a wash sale or not. I'm sure Fidelity would/could do the same.

IIRC Schwab sells the fractional shares the same day if possible.

 

[kaneohe]

With Schwab, if I have a close call like this I just pick up the phone and ask them. They tell me on the spot if it will be a wash sale or not. I'm sure Fidelity would/could do the same.

The only problem w/ this is that you are responsible for the end result and are putting your fate in other's hands. Yes, they should know and probably in most cases will know but it is amazing to me how many times you could be led astray ...........even w/ Schwab...........best to know the answer and see if they come up w/ the same.........and no guiding them.

 

[youbet]

The only problem w/ this is that you are responsible for the end result and are putting your fate in other's hands. Yes, they should know and probably in most cases will know but it is amazing to me how many times you could be led astray ...........even w/ Schwab...........best to know the answer and see if they come up w/ the same.........and no guiding them.

I believe that the IRS goes by whatever the brokerage house says and reports on your 1099. So when Schwab tells me whether they will code it as a wash sale or not, I've trusted that and so far, so good.

This isn't a common activity for me, so if you're saying the rep on the phone might be wrong, or just took a guess without running a hypothetical transaction through their algorithm, and later the actual coding might be different than what I was I told, I suppose that is possible. But it hasn't happened yet in the few times I've called.


Concerning your comment (I bolded it) about knowing the answer yourself...…… Of course. I understand wash sales but when I have a close call situation (very infrequent) it's so easy to have the rep run it through their system (pro-forma and what-if) to see what outcome their algorithm will generate if I actually initiate the transaction. This is especially handy if the wash sale involves adjustments to the basis of some shares purchased within 30 days of selling others of the same stock. (Don't ask me how I know!)


I don't trade all that much and do try to keep things simpler than this...…….

 

[youbet]

IIRC Schwab sells the fractional shares the same day if possible.

Yes, based on infrequent experience.

 

[audreyh1]

I always wait to buy until at least day 31 date from my latest sale.

 

[bingybear]

I looked at my fidelity account and they do not "sell" the shares exactly, they use cash in lieu of fractional shares. This happens about 3 to 4 days after the selling of the rest of the shares. I believe they warn you when this is likely to happens (when setting the sell order). I looked at my tax records for the past two years and don't have anything that would indicated the date the factional sale was done.

A wash sale for a fractional share of a normal stock (not exceptionally high $) should have little effect other than some simple bookkeeping.
Now if you bought the stock back in your IRA/Roth/401k, then it would be unusable. IIRC using spouse's account can also create wash sales.

 

[ownyourfuture]

I'm the OP, & I see the portion of my post that caused confusion. (RunningBum) pointed it out.

Paragraph 4
"However, the last ‘fractional share’ of CAG wasn't credited to my account until December 18th"

I should have stated this:
"However, the proceeds (cash) from the ‘fractional share’ of CAG wasn't credited to my account until December 18th"

Thanks for the replies.

 

[ownyourfuture]

I looked at my fidelity account and they do not "sell" the shares exactly, they use cash in lieu of fractional shares. This happens about 3 to 4 days after the selling of the rest of the shares.

I was going to post the same thing.
You saved me some typing...... Thanks!