Friday, July 22, 2011

What is the amount i'm taxed on if I buy GLD twice in the same year?

I'm trying to understanding the Government's Wash Sale rules. From what I understand if I buy the same investment after waiting 31 days after selling it I can count the first time I bought it as a loss if there is one. For instance, if I bought 1 share of GLD and incurred a $20 loss after selling it. Then I wait 31 days and buy it again, this time I make $30 a share when I sell it. Since I properly observed the wash sale rules, this allows me to take a loss on the first time I bought GLD. So my question is since I lost $20 the first time I bought it and made $30 the second time, do I subtract $30 - $20 to get my taxable gains from GLD for the year? Or must I be taxed on all $30 of gains?

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