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How wash is split across lots?
First, I use GainsKeeper with my personal TDA account and especially look to those knowledgeable with its internal logic. It's very much a black box.
This is lengthy and complex but I'm working very hard to express it as simply and succinctly as possible. First assume "lot" means a purchase. My question deals with a first loss washing to a second lot, and that wash rides along with a second wash on the second sale. The third wash is 200 shares, but the first destination it tries to wash into is a 100 lot; so the third wash must be split.
Disregard commissions for this, as I believe I understand their pro-ration. Maybe next post for that one.
1/1 Buy 100 for $1200
1/10 Buy 100 for $ 800
1/15 Sell 100(of 1/1) for $ 820 ($380 washes to 1/10 lot of 100)
1/20 Buy 100 for $ 800
1/25 Sell 100(of 1/10) for $ 850 ($330 washes to 1/20 lot of 100)
2/2 Buy 500 for $3500
2/5 Sell 200(of multiple) for $1200
So:
The 1/1 lot disappears on 1/15
The 1/10 lot basis goes from $800 to $1180 on 1/15
The 1/10 lot disappears on 1/25
The 1/20 lot basis goes from $800 to $1130 on 1/25
(because the sold lot of 1/10 has basis of $1180, vs. $850 proceeds;wash $330)
Now on 2/5 the sale must be split into part A and part B. Part A will be selling 100 from the oldest remaining lot which is 100 shares on 1/20. B will be a sale of 100 from the next lot which is 500 shares on 2/2.
The loss is -$630 = $1200 - ($1130+$700) where the $700 is 100/500 of $3500. Now comes my quandary. I would assume that you wash 100/200 of the sale loss (Part A) to 1/20, and 100/200 of the sale loss (Part B) to 2/2. I'd wash $315 to each.
But GainsKeeper instead decides that $380 of the $630 (see the 1/15 sale up top) must all wash to 1/20, and the remainder is split.
So $505 = $380 + (100/200)*($630-$380) washes to 1/20 on GainsKeeper
and $125 = $630 - $505 washes to 2/2.
Presumably this is because it linked the $380 to 1/1 and did not want to wash it 35 days ahead, so it washed it all to 1/20; and the remaining wash ties to 1/10 and later, so could all be washed to 2/2.
Several questions arise. How does it do that? Does it build a string of acquisition dates and wash amounts into the basis that it's washed into? Does it consider the 1/1 share amount of 100 and figure that into future determinations, or simply carry the 1/1 date and amount of $380?
It's shameful that the GainsKeeper "Detailed" realized sale activity leaves these answers to the imagination, rather than letting you drill further - or am I missing someplace that I can do that? Is there a more detailed accounting available for examining the basis of lots that contain washes? The Unrealized Detail doesn't seem to give anything additionally useful. (The Unrealized Summary is valuable, because it's the only place I've found that shows the cumulative wash built into bases.) [/rant off]
Your answers may cover this last thought, but I'll mention it: does the $380 stop folding into future lots that are more than 31 days hence from 1/1? Forgive me, but I'll next want to ask when it is even more complex: if I now sold 50 shares of the 1/25 lot, leaving only 50 shares within 31 days of the initially washed $380 from the 1/1 lot, would 50/100 of it realize, leaving $190 washed into 1/25's basis?
Thank you for your infinite patience in reading this far.
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