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Identify Two Tax Planning Techniques That Can Be Used to Avoid

question 117

Essay

Identify two tax planning techniques that can be used to avoid the wash sale disallowance of loss.


Definitions:

Contract Rescinded

The act of legally declaring a contract null and void, as if it never existed, usually due to misinformation, fraud, or mutual mistake.

Sabbath Day

A day set aside for rest and worship according to Jewish, Christian, and some other religions’ traditions, typically observed from sunset on Friday to sunset on Saturday in Judaism and on Sunday in Christianity.

Promissory Estoppel

A legal principle preventing a party from retracting a promise when the other party has reasonably relied on that promise and acted upon it, leading to a detriment.

Reasonable Reliance

Relying on a statement or action in a manner that a reasonable person would consider justified under the circumstances.

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