Checked the web and older posts here on the forum, and i just wanted to make sure i understand this correctly. If i trade in and out of XYZ numerous times throughout the year, but sell or cover all shares of XYZ on december 31st, i avoid a wash sale rolling over into the new year simply by not trading XYZ for 31 days, correct?

One person wrote that he stopped trading at the end of nov. stocks that he heavily traded throughout the year. Others would pick an arbitrary date in december to stop trading certain stocks. Is this unnecessary as long as all positions are closed by december 31st and no similiar stocks are repurchased for 31 days?

> correct?

Technically incorrect, but materially correct.

You are still expected to report the wash sales correctly, but in that case you are avoiding the situation where a wash sale carries over into a new tax year and therefore there is no tax difference.

So if you get audited they might find issue with your reporting but won't be able to assses you additional tax (and associated penalties)

Thanks for your reply. Gainskeeper is provided by my broker, so all wash sales are recorded automatically.

Manny, take a close look at this thread:

http://tickerforum.org/cgi-ticker/akcs-w....

Apparently, Turbotax can screw up wash sale reporting from Gainskeeper data.

-BigCowboy