did the repurchase of A occur 30 days before or after the sale of B? then the only way the wash sale rule would apply would be if A was substantially identical to B.
from IRS PUB 550
A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade,
3. Acquire a contract or option to buy substantially identical stock or securities, or
4. Acquire substantially identical stock for your individual retirement arrangement (IRA) or Roth IRA.
most people do not know about the 4th item
In determining whether stock or securities are substantially identical, you must consider all the facts and
circumstances in your particular case. Ordinarily, stocks or securities of one corporation are not considered substantially identical to stocks or securities of another corporation. However, they may be substantially identical in some cases. For example, in a reorganization, the stocks and securities of the predecessor and
successor corporations may be substantially identical.
Similarly, bonds or preferred stock of a corporation are not ordinarily considered substantially identical to the common stock of the same corporation. However, where the bonds or preferred stock are convertible into common stock of the same corporation, the relative values, price changes, and other circumstances may
make these bonds or preferred stock and the common stock substantially identical. For example, preferred stock is substantially identical to the common stock if the preferred stock:
• Is convertible into common stock,
• Has the same voting rights as the common stock,
• Is subject to the same dividend restrictions,
• Trades at prices that do not vary significantly from the conversion ratio, and
• Is unrestricted as to convertibility.
So Stock "A" was acquired a 2 years ago and the loss on sale of Stock "B" was in January of this year, so the 30 day rule appears to be OK. The issue if they are similar or identical is not valid for these stock. Very different holdings.
I have not sold the L-T capital gain stock ("A") yet, but doesn't it make sense to sell the winner now ("A"), offset the gain with the loss and avoid the tax on capital gains (sometime in the future) and then repurchase the stock back the next day. This basically resets the purchase price of Stock "A" at a higher price. Am I looking at this correctly.
I think the answer is more complicated... what is your expected tax bracket and your ordinary income?
up to $3000 of the losses are deductible against ordinary income. Is your tax bracket higher or lower than the capital gains rate you are going to pay?
further, those short term losses could be netted again short term gains where they can be more valuable than netting against long term gains (long term losses can not be netted against short term gains!!! - the IRS is too smart!)
for example, you are in the 24% tax bracket and your capital gains tax bracket is 15%. In this case, the losses are more valuable to reduce up to $3000 of ordinary income or any short term gains as you are otherwise paying at the 24% tax bracket than they are to cover long term capital gains at 15%.
the $3,000 limit is each year, so if you don't use it in 2019, it'll be there in 2020, 2021, etc.