[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1091-2]

[Page 208]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1091-2  Basis of stock or securities acquired in ``wash sales''.

    (a) In general. The application of section 1091(d) may be 
illustrated by the following examples:

    Example 1. A purchased a share of common stock of the X Corporation 
for $100 in 1935, which he sold January 15, 1955, for $80. On February 
1, 1955, he purchased a share of common stock of the same corporation 
for $90. No loss from the sale is recognized under section 1091. The 
basis of the new share is $110; that is, the basis of the old share 
($100) increased by $10, the excess of the price at which the new share 
was acquired ($90) over the price at which the old share was sold ($80).
    Example 2. A purchased a share of common stock of the Y Corporation 
for $100 in 1935, which he sold January 15, 1955, for $80. On February 
1, 1955, he purchased a share of common stock of the same corporation 
for $70. No loss from the sale is recognized under section 1091. The 
basis of the new share is $90; that is, the basis of the old share 
($100) decreased by $10, the excess of the price at which the old share 
was sold ($80) over the price at which the new share was acquired ($70).

    (b) Special rule. For a special rule as to the adjustment to basis 
required under section 1091(d) in the case of wash sales involving 
certain regulated investment company stock for which there is an average 
basis, see paragraph (e)(3)(iii) (c) and (d) of Sec. 1.1012-1.

[T.D. 6500, 25 FR 11910, Nov. 26, 1960, as amended by T.D. 7129, 36 FR 
12738, July 7, 1971]