As we experience another snowy day, I thought you might be staying out of the snow and thinking about tax saving strategies that may help you before this year is over.

As you are planning your capital gains and capital losses for year end, you need to be aware of the fact that the wash sale rules also apply to your IRA accounts. 

What does that mean to you?

If you sell a stock or mutual fund for a loss in your taxable account, and, within 30 days before or after you make that sale, you purchase the same stock or mutual fund in your IRA account, the loss is not deductible under the wash sale rules.

Let's say you have $50,000 short-term capital loss on a sale today of your Fiserv, Inc. stock.  You think it will return in value, so tomorrow you purchase the shares in your IRA account.

Because of the wash sale rules, you will be disallowed from claiming the $50,000 loss on the sale in your regular account because you repurchased the same stock in your IRA account in less than 31 days.

You should also be careful of doing this in your 401(k) account.  No regulations have been issued in this area, but why should you take a chance?

If you have any questions, please do not hesitate to call and set up an appointment to discuss your personal situation.