Federal Taxation 1

When the wash sale rules apply, the realized loss is:

Multiple Choice

• recognized at time of sale and added to basis of the newly acquired stock.

• not recognized at time of sale and subtracted from the basis of the newly acquired stock.

• recognized at time of sale.

• not recognized at time of sale and added to basis of the newly acquired stock.

• not recognized at time of sale and does not affect basis of newly acquired stock.