The wash sale rules were put into place to avoid year end games; not necessarily between a taxable and non taxable account, but between two different accounts.
The wash sale rules under Section 1091 can be a little complicated and the basis of the new securities could be adjusted:
- if the sales price was less than the repurchase price, then the basis of the new securities is deemed to be the basis of the securities sold plus the difference between the repurchase and the sale prices.
- if the sales price was more than the repurchase price, then the basis of the new securities is considered to be the basis of the securities sold minus the difference between the sale and the repurchase prices.
- there is also an IRS revenue ruling where the taxpayer had your scenario and received no basis adjustment. However, there are too few facts to understand why. RR 2008-5.
I don't plan on running the numbers with any scenarios. In general, you should just avoid this issue and wait 31 days.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
