Hi, thanks for the information. Wash sales still confuse me. Can you please help in understanding my situation. If I day trade all year long, buying and selling the same stocks before 31 days. At the end of the year, my realized gains are -$1000. Would I still have to pay taxes even though I am not profitable? Thanks for the help.
The answer to your question depends on several factors. If you are true day trading and not holding any positions open to the next day, then you may not have any wash sales attached to year-end open positions. However, if you make new trades in January of the next year, these could potentially trigger wash sale deferrals from losses that occurred in December. If you deferred more than $1,000 to the next year, then it may start to increase tax liability for the prior year. Again this all depends on the specific dates of trades, if there are "replacement" positions, etc. See Lessons 2-4 of our Wash Sale series to learn more. Some day traders simply take a 30-day hiatus from trading at year end - either all positions, or the losing positions, in order to avoid wash sales. Or, using the TradeLog application, traders are able to monitor wash sales at year-end and make educated trading decisions to avoid or control wash sale impacts before its too late.
If I buy a stock make profit and buy it back before 30 days and continue to do so never losing a trade and never going beyond 30 days without buying it back does that result in paying zero taxes on that ticker for that year? because I always bought it back within 30 days.
@@TradeLogLearning lets say i make a trade losing $3000. 25 days later start another trade on that ticker that wins 2000 and exit on dec 29. On jan 1st I buy back the ticker again. At that point my taxes for the previous year on that ticker would be 2000 am I right? so the 3000 loss will not show up on the tax report my broker gives me.
@@nastynate4481Actually for what you describe, assuming the number of shares are all the same, you would first have a 3,000 wash sale adjustment to the cost basis of first replacement. When that closes on Dec 29 that wash sale adjustment would reduce your $2,000 win to a loss of $1,000. And the Jan 1 buy would then trigger another wash sale and would defer that $1,000 loss into the next year. So your prior year would have a taxable G/L of zero. How does that happen? Check out the second video we just posted explaining the wash sale rule and required adjustments. th-cam.com/video/J8XLfE7OAyQ/w-d-xo.html You can also get a free trial of TradeLog and manually enter scenarios to see how they play out.
Is there a tax pro in the group? Have a question on wash sale, here is scenario: Let’s say I day trade Tesla all year… $100 up, $100 down. After 12 months I’m still at break even. I day trade another stock and double my account. If I sell both stocks today and wait 31 days, will I only pay tax on my net gains?
In our upcoming videos we'll explain this more: typically if you close out a position and don't reopen for 31 days, you are able to capture all the losses - and in your case only have the net gain. Learn more: tradelog.com/education/wash-sales-for-traders/#avoid-wash-sales
I have a question that I have gotten mix answers on, and can't find anywhere. Lets say you purchase ACN for the first time on 5/15, 5/17, 5/29. Held onto it and sold it at a loss 6/14. Never rebought it back nor plan to for over 31 days. Would that be a wash sale? I was told yes and no by some people. Those who said yes, was because it was 30 days before the sale. Those who said No, was because when it was purchased there was no loss, and when it was sold at a Loss it was never rebought.
Disclaimer: We cannot provide financial, tax, or legal advice. Since your question may deal with specific and actual trades we must recommend consulting with a CPA or tax advisor regarding that situation. We can tell you the IRS regulations are vague enough for there to likely not be a definitive answer. There are arguments about whether a wash sale should be adjusted back to a purchase of shares closed at the same time or before the loss. But the law simply doesn’t clarify. The TradeLog application will typically adjust a wash sale to a purchase prior to the loss, when possible. But here’s an important part of the scenario you described: if you closed all the shares on 6/14 and made no other ACN trades for 31 days, then the loss is realized in the tax year no matter what adjustments there are. True, there may be a wash sale adjustment moving the loss from some shares to the cost basis of some of the earlier shares purchased (that all depends on specific prices of your purchases/sales). But those adjusted trades were also closed, therefore the total loss amount is realized on 6/14. The only exception would be if you had a wash sale triggered by a trade in an IRA account. Too often traders worry excessively over a wash sale adjustment, but the thing to usually worry about is if the wash sale impacts your taxable bottom-line. Watch the next videos in this series to understand when to be concerned about wash sales and how TradeLog can help you in those scenarios. You can always use the Free Trial version of TradeLog to check TradeLog’s reporting for a scenario. You can manually enter trades for a specific scenario; or, for best results import the entire tax year to-date to see exactly how wash sales are effecting you.
Hi, I have a wash sale question. Pleaseeee help...looked all over and can't find an answer, even read the IRS pub: If I sold 4000 shares of a stock for a loss and then repurchased 3,000 shares of the same identical stock within 30 days (yes, duh...really I don't believe the transaction history but what can I do to battle that...anyway, that's another question), does the total loss from the 4,000 shares go into the repurchase of the 3,000 shares? I thought wash sale was per share so I could still write off the loss for the 1,000 shares I didn't repurchase, no? The Schwab guy is telling me the disallowed loss is for the position and the # of shares doesn't matter...the total loss goes back into the share repurchase. He said even if I sold 4,000 shares and rebought 1 share, the total loss would be included in the new repurchase?? I don't think there's anyway that's true??? ie if easier/needed: I lost $4,000 on the 4,000 shares. I would think when I repurchase the 3,000 shares, that the loss included in this purchase = $3,000 and I would be able to take the $1,000 loss for the other 1,000 shares not repurchased, no? They are including the entire $4,000 loss in the repurchase of the 3,000 shares. Thanks so much!!!
You are correct! This reference to our wash sales topic online quotes the IRS guidance about unequal shares: tradelog.com/education/wash-sales-for-traders/#calculate Wash sales can be confusing and brokers can't be expected to be tax experts. TradeLog uses these rules when generating our IRS-ready tax reporting. Hope this information is helpful.
@@TradeLogLearning Thanks so much! Exactly what I thought and needed to see. REALLY appreciate it! It still bothers me that I spoke to someone in their tax dept and they said the wash sale rule wasn't per share...that's REALLY a basic 101 thing they should know imo. So I had to go through my 1099 to catch $8K in losses that they never included in anything! They didn't even add it to my cost basis for the 3,000 shares. What a joke!
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Hi, thanks for the information. Wash sales still confuse me. Can you please help in understanding my situation. If I day trade all year long, buying and selling the same stocks before 31 days. At the end of the year, my realized gains are -$1000. Would I still have to pay taxes even though I am not profitable? Thanks for the help.
The answer to your question depends on several factors. If you are true day trading and not holding any positions open to the next day, then you may not have any wash sales attached to year-end open positions. However, if you make new trades in January of the next year, these could potentially trigger wash sale deferrals from losses that occurred in December. If you deferred more than $1,000 to the next year, then it may start to increase tax liability for the prior year. Again this all depends on the specific dates of trades, if there are "replacement" positions, etc. See Lessons 2-4 of our Wash Sale series to learn more.
Some day traders simply take a 30-day hiatus from trading at year end - either all positions, or the losing positions, in order to avoid wash sales. Or, using the TradeLog application, traders are able to monitor wash sales at year-end and make educated trading decisions to avoid or control wash sale impacts before its too late.
If I buy a stock make profit and buy it back before 30 days and continue to do so never losing a trade and never going beyond 30 days without buying it back does that result in paying zero taxes on that ticker for that year? because I always bought it back within 30 days.
A wash sale only happens when you sell at a loss and then replace - buy back - within 30 days. In your example your profits are all taxable gains.
@@TradeLogLearning lets say i make a trade losing $3000. 25 days later start another trade on that ticker that wins 2000 and exit on dec 29. On jan 1st I buy back the ticker again. At that point my taxes for the previous year on that ticker would be 2000 am I right? so the 3000 loss will not show up on the tax report my broker gives me.
@@nastynate4481Actually for what you describe, assuming the number of shares are all the same, you would first have a 3,000 wash sale adjustment to the cost basis of first replacement. When that closes on Dec 29 that wash sale adjustment would reduce your $2,000 win to a loss of $1,000. And the Jan 1 buy would then trigger another wash sale and would defer that $1,000 loss into the next year. So your prior year would have a taxable G/L of zero. How does that happen? Check out the second video we just posted explaining the wash sale rule and required adjustments. th-cam.com/video/J8XLfE7OAyQ/w-d-xo.html
You can also get a free trial of TradeLog and manually enter scenarios to see how they play out.
Is there a tax pro in the group? Have a question on wash sale, here is scenario:
Let’s say I day trade Tesla all year… $100 up, $100 down. After 12 months I’m still at break even.
I day trade another stock and double my account.
If I sell both stocks today and wait 31 days, will I only pay tax on my net gains?
In our upcoming videos we'll explain this more: typically if you close out a position and don't reopen for 31 days, you are able to capture all the losses - and in your case only have the net gain. Learn more: tradelog.com/education/wash-sales-for-traders/#avoid-wash-sales
I have a question that I have gotten mix answers on, and can't find anywhere.
Lets say you purchase ACN for the first time on 5/15, 5/17, 5/29. Held onto it and sold it at a loss 6/14. Never rebought it back nor plan to for over 31 days. Would that be a wash sale?
I was told yes and no by some people. Those who said yes, was because it was 30 days before the sale. Those who said No, was because when it was purchased there was no loss, and when it was sold at a Loss it was never rebought.
Disclaimer: We cannot provide financial, tax, or legal advice. Since your question may deal with specific and actual trades we must recommend consulting with a CPA or tax advisor regarding that situation. We can tell you the IRS regulations are vague enough for there to likely not be a definitive answer. There are arguments about whether a wash sale should be adjusted back to a purchase of shares closed at the same time or before the loss. But the law simply doesn’t clarify. The TradeLog application will typically adjust a wash sale to a purchase prior to the loss, when possible.
But here’s an important part of the scenario you described: if you closed all the shares on 6/14 and made no other ACN trades for 31 days, then the loss is realized in the tax year no matter what adjustments there are. True, there may be a wash sale adjustment moving the loss from some shares to the cost basis of some of the earlier shares purchased (that all depends on specific prices of your purchases/sales). But those adjusted trades were also closed, therefore the total loss amount is realized on 6/14. The only exception would be if you had a wash sale triggered by a trade in an IRA account.
Too often traders worry excessively over a wash sale adjustment, but the thing to usually worry about is if the wash sale impacts your taxable bottom-line. Watch the next videos in this series to understand when to be concerned about wash sales and how TradeLog can help you in those scenarios.
You can always use the Free Trial version of TradeLog to check TradeLog’s reporting for a scenario. You can manually enter trades for a specific scenario; or, for best results import the entire tax year to-date to see exactly how wash sales are effecting you.
Hi, I have a wash sale question. Pleaseeee help...looked all over and can't find an answer, even read the IRS pub:
If I sold 4000 shares of a stock for a loss and then repurchased 3,000 shares of the same identical stock within 30 days (yes, duh...really I don't believe the transaction history but what can I do to battle that...anyway, that's another question), does the total loss from the 4,000 shares go into the repurchase of the 3,000 shares? I thought wash sale was per share so I could still write off the loss for the 1,000 shares I didn't repurchase, no? The Schwab guy is telling me the disallowed loss is for the position and the # of shares doesn't matter...the total loss goes back into the share repurchase. He said even if I sold 4,000 shares and rebought 1 share, the total loss would be included in the new repurchase?? I don't think there's anyway that's true??? ie if easier/needed: I lost $4,000 on the 4,000 shares. I would think when I repurchase the 3,000 shares, that the loss included in this purchase = $3,000 and I would be able to take the $1,000 loss for the other 1,000 shares not repurchased, no? They are including the entire $4,000 loss in the repurchase of the 3,000 shares. Thanks so much!!!
You are correct! This reference to our wash sales topic online quotes the IRS guidance about unequal shares: tradelog.com/education/wash-sales-for-traders/#calculate
Wash sales can be confusing and brokers can't be expected to be tax experts. TradeLog uses these rules when generating our IRS-ready tax reporting. Hope this information is helpful.
@@TradeLogLearning Thanks so much! Exactly what I thought and needed to see. REALLY appreciate it! It still bothers me that I spoke to someone in their tax dept and they said the wash sale rule wasn't per share...that's REALLY a basic 101 thing they should know imo. So I had to go through my 1099 to catch $8K in losses that they never included in anything! They didn't even add it to my cost basis for the 3,000 shares. What a joke!