Today’s Tale of Woe (how I spent my weekend). Accidental Sale of Stock

[Skylane]

Is anyone familiar w/ PLRs or if there are  Rev-Procs pertaining to accidental/unintentional/inadvertent sale of stock.

TP had purchased shares of NVDA from 2018- 2022 

He decided to set a stop loss limit.  He inadvertently entered the stoploss at 800 when he intended to enter 500.

Well, NVDA  hit 800 and it all got sold on a Friday afternoon (at a hugh profit).

It was not intended, so TP bought it all back when market opened on Monday. 

Sadly, the accidental trade came with a 1099B code D.... He’s  looking at a CG tax of 200k federal & 60K state.

TP is not a trader.  Though he has a decent-size portfolio, it’s mostly blue chips that he has accumulated over the years.  The only 1099Bs I usually  see are consolidations and mergers.

The IRS has a history of ‘forgiveness’ of unintended mistakes that result in tax and/or penalty;  i.e. Rev Proc. 2020-46 “Waiver of the 60-Day Rollover Requirement”  or Waiver of the excise tax for the failure to take a RMD on form 5329

My hope is that there may be a Rev-Proc that addresses this or if  Private Letter Ruling might be appropriate avenue. 

Appreciate any thoughts  or is he  SOL

[IRonMaN]

I think that will be filed under the SOL category.  

[BobKamman]

Maybe he intended 500.  Maybe that's what he did a year earlier, and then he raised it to 800 and forgot.  Or maybe it was a trailing stop.  If he wants to play the game, he has to follow the rules.  NVDA is down 28% since the election, but it looks like he still has a gain on the shares he bought back.

Once the exclusion on tips and Social Security is enacted, Congress may amend the "wash sale" rule, limiting the amount of capital gains taxed every year to $3,000.  

[Skylane]

Preparing the return and the tax calculation is easy. I agree w/ SOL... but I don't know it all.   The numbers are large enough that I will recommend  he speaks w/ a tax attorney for verification..   And yes, I believe the stoploss price was keyed in incorrectly.  (I enter incorrect digits all day long). 

Thanks for the reply