| Course | GF592 Income Tax Planning and Strategies |
|---|---|
| Unit | Unit 9 |
| Paper type | Tax research memo |
| Length | About 820 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MS in Finance |
| Updated | October 2026 |
Free sample paper for GF592 Unit 9
Seven Days and an IRA: A Unit 9 Tax Research Memo on a Wash Sale Across Accounts
[Student Name]
Purdue University Global
GF592: Income Tax Planning and Strategies
Unit 9 Tax Research Memo
[Instructor Name]
[Date]
The investor, the fund and all amounts are composite and illustrative; the authorities cited are real; this is a course sample, not tax advice.
To: Supervising preparer From: Staff analyst Re: Wash sale effect of an IRA purchase, client account review
Facts
On December 12, the client sold 1,200 shares of an index fund in her taxable brokerage account at $41.20 a share. Her basis was $52.75 a share. The loss was $11.55 a share, or $13,860.
On December 19, seven days later, her traditional IRA bought 300 shares of the same fund through an automatic investment she had set up earlier in the year. No other purchases of the fund occurred in any of her accounts between November 12 and January 11.
Issue
Does the purchase of the same fund by the client's IRA within 30 days after the sale disallow part of the loss on the taxable sale?
Short Answer
Yes. The IRA purchase triggers the wash sale rule for 300 of the 1,200 shares. One quarter of the loss, $3,465, is disallowed. Because the replacement shares are in an IRA, the disallowed loss is not added to their basis and is lost permanently. The remaining $10,395 is allowed.
Analysis
The statute. Section 1091(a) disallows a loss on a sale of stock or securities if, within a period beginning 30 days before and ending 30 days after the sale, the taxpayer acquires substantially identical stock or securities. Shares of the same fund are identical, so the only questions are timing and whether an IRA purchase counts as the taxpayer's acquisition. The purchase on December 19 falls within the 61-day window that runs from November 12 to January 11.
The proportional rule. When fewer shares are bought than were sold, the loss is disallowed only on the number of shares acquired. The client sold 1,200 and her IRA bought 300, so 300 divided by 1,200, or 25 percent of the loss, is disallowed: $3,465. The other 900 shares' loss, $10,395, is allowed (Internal Revenue Service, 2025).
The IRA purchase. The Internal Revenue Service has ruled that when an individual sells securities at a loss and causes her IRA to buy substantially identical securities within the window, the loss is disallowed, and the individual's basis in the IRA is not increased by the disallowed amount (Rev. Rul. 2008-5, 2008).
In an ordinary wash sale the disallowed loss is only postponed, since the replacement shares carry it forward in their basis; when the replacement is bought inside an IRA, there is no basis to add it to, so the loss disappears for good.
Alternatives Considered and Rejected
Two arguments for allowing the full loss were examined. The first is that the IRA is a separate entity, so its purchase is not the taxpayer's acquisition. The ruling rejects this directly: the client controls the IRA's investments, and allowing the loss would let taxpayers sell at a loss in one account and buy back in another without consequence. The second is that the purchase was automatic, set up months earlier rather than chosen after the sale. The statute contains no intent test; it looks only at whether an acquisition occurred within the window. An automatic purchase is still a purchase, so neither argument changes the answer.
What Remains Open
A second question is not settled by the authorities above. If the client had sold the index fund and bought a different company's fund tracking the same index, would the two be substantially identical? No statute, regulation or published ruling answers this directly for index funds. Many practitioners treat funds from different sponsors that track the same index as a risk rather than a safe harbor, and some treat them as not identical because their holdings, fees and tracking differ slightly. Because the client's case involves the same fund, this question does not affect the answer here, but it should be flagged for future harvesting.
Planning Note
The loss would have been fully allowed if the IRA's purchases of the fund, including any automatic investments and reinvested dividends, had been suspended from November 12 through January 11. Year-end selling to realize losses is common, and investors often forget that their own retirement accounts can undo it (Dyl, 1977). For future years, the client's automatic IRA purchases should be directed to a different fund during any month in which she harvests losses in the taxable account, and dividend reinvestment in the taxable account should be checked as well.
Conclusion
Of the $13,860 loss, $10,395 is deductible this year and $3,465 is permanently disallowed. The client should be told before the return is filed, and the automatic IRA investment should be changed before her next harvesting decision.
References
Dyl, E. A. (1977). Capital gains taxation and year-end stock market behavior. The Journal of Finance, 32(1), 165-175. https://doi.org/10.1111/j.1540-6261.1977.tb03250.x
Internal Revenue Service. (2025). Investment income and expenses (Publication 550). https://www.irs.gov/publications/p550
Rev. Rul. 2008-5, 2008-3 I.R.B. 271 (2008).
What the GF592 Unit 9 assignment asks for
GF592's Unit 9 asks for a tax research memo on a single question, written the way a firm would file it. Open with the facts only, giving dates, share counts, prices and accounts, and leave out any analysis. State the issue as one question that can be answered yes or no. The short answer should give that answer and the dollar result in a few sentences. In the analysis, work from the statute to the regulation to any ruling or case, applying each to the client's dates rather than restating the rule. Address the strongest arguments against your conclusion and explain why they fail. Identify any related question the authorities do not settle, and say whether it affects this client. A planning note should tell the client how to avoid the result next time. End with a conclusion that repeats the numbers. Cite the statute, the revenue ruling and IRS Publication 550 in APA 7.
How this GF592 Unit 9 example is built
The facts section gives the December 12 sale at $41.20 against a $52.75 basis and the IRA's December 19 purchase, with no other purchases between November 12 and January 11. The issue is one question. The short answer states that 300 of 1,200 shares are caught and $3,465 of the loss is gone. The analysis moves through Section 1091(a) and its 61-day window, the proportional rule that limits disallowance to the shares acquired, and Revenue Ruling 2008-5 on IRA purchases. The highlighted sentence contrasts a postponed loss in a taxable account with a lost one in an IRA. Two arguments for allowing the full loss, that the IRA is a separate entity and that the purchase was automatic, are rejected. An open question about different sponsors' funds tracking the same index is flagged. Dyl's study of year-end selling supports the planning note, and a conclusion restates the figures.
Where the points sit in the GF592 Unit 9 rubric
Graders of this GF592 research memo look first at structure, because the facts, issue, short answer and analysis must each do their own job. Facts that contain analysis, or an issue that cannot be answered yes or no, lose points before the law is considered. Accuracy in the analysis carries the most weight: the 61-day window must be applied to the actual dates, the proportional rule must limit the disallowance to the shares bought, and the ruling must be cited for the effect of an IRA purchase. Instructors reward a memo that takes the opposing arguments seriously and explains why they fail. Flagging an unsettled question without overstating it shows research judgment. A planning note that tells the client exactly which purchases to suspend, and for how long, ties the research to advice. The statute, Revenue Ruling 2008-5 and IRS Publication 550, cited in APA 7, are the authorities needed.
Common GF592 Unit 9 mistakes, and how to avoid them
GF592 Unit 9 memos often go wrong by disallowing the whole loss when only part of the position was repurchased. Others treat the IRA loss as postponed, adding it to basis as if the purchase had been in a taxable account, which misses the effect of the ruling. Writers sometimes count the window as 30 days total rather than 30 days on each side of the sale. Structural problems are common too: analysis creeps into the facts, the short answer omits the dollar figure, or the issue names a subject where a yes-or-no question belongs. Some memos cite many secondary sources that restate the rule and never apply it to the client's dates. An open question about index funds from different sponsors should be noted, not answered as if settled. Finally, the planning note should cover automatic investments and reinvested dividends, since those are the purchases clients forget when they harvest losses.
Get a GF592 Unit 9 example written to your instructions
Paste the GF592 Unit 9 research question and fact pattern, the citation format required, and the rubric. The custom memo states facts, frames one issue, answers it up front and supports the answer with provision, regulation and ruling, flagging anything genuinely unsettled. Nothing in it is advice on a real return. The first sample is free; 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More GF592 papers and MS in Finance samples
- GF592 Unit 1: Tax Bracket Myth Discussion Post
- GF592 Unit 2: Nine Receipts Gross Income Worksheet
- GF592 Unit 3: Deduction and Credit Value Problem
- GF592 Unit 4: Education Credit Phaseout Calculation
- GF592 Unit 5: Rental House Sale Workup
- GF592 Unit 6: Hobby or Business Seminar Reflection
- GF592 Unit 7: Charitable Bunching Timing Memo
- GF592 Unit 8: Roth or Traditional Account Comparison
- GF592 Unit 10: Comprehensive Planning Case
- GF591 Unit 9: Umbrella and Liability Coverage Review
- GF590 Unit 9: Household Investment Policy Statement
- GF500 Unit 9: Money Market Fund Regulatory Memo
- GF585 Unit 9: Revenue Forecast Variance Analysis
GF592 Unit 9 questions, answered
Why does the IRA purchase make the loss permanent?
In a taxable account, a disallowed wash sale loss is added to the basis of the replacement shares, so it returns when those shares are sold. The ruling on IRA purchases holds that the IRA's basis is not increased, so there is nothing for the loss to attach to and it never comes back. The sample explains both steps and cites the ruling by number.
How many authorities should a research memo cite?
As many as the question needs and no more. The sample relies on the statute, one regulation and one revenue ruling because together they answer the issue completely. Adding secondary sources that restate the same rule adds length without authority. Where the law is unsettled, citing the competing positions is necessary, and the memo does that for its open question.
What if the fact pattern does not name the account type?
Then the memo should say which facts it assumes and how the answer changes if they differ. Account type decides whether a disallowed loss is deferred or lost, so it cannot be left implicit. The sample's facts name the IRA; a memo working from thinner facts would present both outcomes and identify the fact that chooses between them.
Where can I find a free GF592 Unit 9 sample paper?
This page carries a full GF592 Unit 9 tax research memo on a wash sale triggered by an IRA purchase, with the facts, issue, short answer, analysis under Section 1091 and Revenue Ruling 2008-5, and APA 7 references.
How long is the wash sale window in GF592 Unit 9?
The rule covers purchases from 30 days before the sale through 30 days after it, a 61-day period including the sale date. For a December 12 sale, the sample checks every account for purchases from November 12 through January 11.