Hi,
I've found a few threads about the 4 week rule for selling stock and realizing capital losses. However, it's almost always asked from the context of the bed & breakfast loophole (eg: selling to realize losses, with the intention of re-acquiring the stock).
My scenario is very straightforward. Let's say on March 1st I receive 100 shares of vested stock from my company, with approximately 50 of them being sold automatically to offset income tax. By the time I get around to sell the shares on March 7th, the market has taken a downturn and now my 50 remaining shares are worth -€1000 less than at vest time.
I'm not going to buy the stock again (or get more stock from my company) within 4 weeks. Can I claim a capital loss on the -€1000?
The example on the Revenue page seems to be very clear (sorry, it won't let me post if I add a link to it):
And this would imply I can't claim the capital losses. If that's the case, anybody knows what's the reasoning or context behind this rule?
My only guess is that, by selling within 4 weeks, I'm also exempted from the FIFO rule (in the case of having older stock from the same company) so ultimately it's already a tax-advantaged move even with the small loss.
Just wanted to hear your views on this, in case I'm misunderstanding this.
EDIT: Ok, I found a couple of threads on boards.ie and it seems that yes, you can't use the capital losses if you sell the shares within 4 weeks of being acquired, unless you have acquired more of those shares within the same 4 weeks. In which case you may offset the losses against any gains from those when you sell in the future.
But if you haven't acquired any shares of the same asset within the 4 weeks since the original ones were bought, you can forget about the losses, as you ain't never going to use them.
I've found a few threads about the 4 week rule for selling stock and realizing capital losses. However, it's almost always asked from the context of the bed & breakfast loophole (eg: selling to realize losses, with the intention of re-acquiring the stock).
My scenario is very straightforward. Let's say on March 1st I receive 100 shares of vested stock from my company, with approximately 50 of them being sold automatically to offset income tax. By the time I get around to sell the shares on March 7th, the market has taken a downturn and now my 50 remaining shares are worth -€1000 less than at vest time.
I'm not going to buy the stock again (or get more stock from my company) within 4 weeks. Can I claim a capital loss on the -€1000?
The example on the Revenue page seems to be very clear (sorry, it won't let me post if I add a link to it):
And this would imply I can't claim the capital losses. If that's the case, anybody knows what's the reasoning or context behind this rule?
My only guess is that, by selling within 4 weeks, I'm also exempted from the FIFO rule (in the case of having older stock from the same company) so ultimately it's already a tax-advantaged move even with the small loss.
Just wanted to hear your views on this, in case I'm misunderstanding this.
EDIT: Ok, I found a couple of threads on boards.ie and it seems that yes, you can't use the capital losses if you sell the shares within 4 weeks of being acquired, unless you have acquired more of those shares within the same 4 weeks. In which case you may offset the losses against any gains from those when you sell in the future.
But if you haven't acquired any shares of the same asset within the 4 weeks since the original ones were bought, you can forget about the losses, as you ain't never going to use them.
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