Tariq Sold Certain U

question 60

Essay

Tariq sold certain U.S. Government bonds and State of Oregon bonds at a loss to offset short-term capital gain from a previous transaction. He felt that the U.S. Government and State of Oregon bonds were "good" investments, so he repurchased identical securities within one week. Do these transactions constitute wash sales?
If the bond sales resulted in the recognition of gain (rather than loss), would the wash sale provisions prevent the gains from being recognized?

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Definitions:

Alarm Reaction

The initial stage of the stress response, where the body mobilizes resources to confront a stressor.

Resistance

The refusal to accept or comply with something; in a psychological context, it may refer to an individual's unconscious defense mechanisms against certain thoughts or realities.

Exhaustion

A state of extreme physical or mental fatigue, usually resulting from stress or overwork.

Immune Response

The body's defense mechanism against pathogens, including the activation and coordination of white blood cells and the production of antibodies.