Yea i know its a wash sale. That's why I picked 0. Because he sold stock within 15 days, so he's not allowed to take a loss.
oh, wait I think I get it now…. If you break up the question into 2 parts it makes more sense.
Part 1. Sands purchased 100 shares of Eastern Corp. stock for $18,000 on April 1 of the prior year. On February 1 of the current year, Sands sold 50 shares of Eastern for $7,000.
This part has nothing to do with the wash sale rules (doesn't fall within the 30 days before/after time frame)
50 shares at 9,000 sold for 7,000 gives you a loss of 2,000. Again, doesn't fall within the wash sale rules because of the timing.
NOW part 2. Fifteen days later, Sands purchased 25 shares of Eastern for $3,750.
15 days? WASH SALE RULES APPLY…. Originally, he was entitled to a loss of 2,000 however, because he turned around a re-purchased HALF of them back he can only deduct HALF of the loss. So 1,000 is the allowed loss answer C
.
