The wash sale provisions apply to which of the following?
I.Jim bought 500 additional shares of Alfa Gamma stock for $4,000 on December 2,2013.Jim owned 2,500 shares after that purchase.On December 26,2013,Jim realizes a loss of $1,500 on the sale of 250 shares of Alfa Gamma stock.
II.Calvin realizes a $8,000 loss on the December 29,2013,sale of Sloan corporate bonds.Each bond has a face value of $1,000.He replaces the Sloan corporate bonds with the same number of Jackson corporate bonds,each with a face value of $1,000 on January 16,2014.The Jackson bonds have a different interest rate and maturity date then the Sloan bonds but have the same bond rating (AAA).

Question

Quizplus · Accepted Answer

The wash sale provisions apply to statement I. Jim's purchase of additional shares within 30 days of realizing a loss on the sale of shares triggers the wash sale rule, disallowing the $1,500 loss. Statement II does not involve the purchase of "substantially identical" securities within 30 days of the sale, and therefore the wash sale provisions do not apply.

The Wash Sale Provisions Apply to Which of the Following