Thanks. My question is if I bought 100 shares at $100 and another 100 shares at $90 within 30 days, and then sold them at $95 together to break even for 0 gain or loss. Then is it qualified as wash sale for the first 100 shares which actually is a loss? I understanding is the "sale action" is 200 shares here and there is no loss or gain for it, so the first half of the sale is not considered wash sale.
Technically in this situation you have two trades: 100 shares sold at a loss of $500, and another 100 shares sold at a gain of $500. The IRS says to match up in this way (see tradelog.com/education/wash-sales-for-traders/#calculate) The TradeLog application would match these trades accordingly, then would make a wash sale adjustment to the 100 shares bought at $90 (assuming that was within 30 days before the loss). Making that adjustment would move the loss from the first lot into the second lot. The net result is still a gain of zero $0. But we've made a wash sale adjustment as required. It might seem easier to just treat the whole lot as one trade with net zero, but TradeLog follows those IRS rules for unequal shares and creates the details for verifiable accuracy.
It sounds like you're describing the column on your 1099-B for "total wash sale loss disallowed", the problem is the 1099-B doesn't really tell you the whole picture. The total on the 1099-B is just a total of every adjustment the broker made. It may be that you closed out all the positions that were adjusted and realized the loss, or it may be some of those losses were deferred to the next tax year. Sadly 1099-B doesn't give you that info. If you're using TradeLog, the Wash Sale Details report breaks down how wash sales impact your bottom line. It's usually bad when wash sales have increased your net taxable gain causing you to owe more taxes. Hope that helps/
TradeLog creates independent tax reporting with comprehensive wash sale adjustments, using your actual trade history and not the 1099-B. This is because of flaws with 1099-B reporting. See: tradelog.com/#broker-1099-b You can learn more about how TradeLog works from our website, and even use our free trial to preview TradeLog results.
Thank you for the video. It's very helpful. However I'm in a situation with several lots bought on the same day. I sold the first lot accidentally and incurred a disallowed loss and an increased basis cost to my second lot of the same day. I'm planning to take a loss to offset some of my realized gain in the same account. So my question is: would I be able to claim a loss for tax purposes if I sell all of the positions acquired on the same day, in the same month? I do not plan to buy the same ETF again within the 60 day window. Thank you in advance for your help.
If you close all shares of a position then you've realized any attached wash sale adjustments. As long as you don't make a replacement trade within the 30 days after, you should avoid further wash sale adjustments.
Great info! Thank you I understand the wash sale and adjusted cost basis for individual stocks, but how does it work with options? I don't see an adjusted cost basis when I sell for a loss and buy the options right away. Does it have to be same strike price? Or call/put? I'm not opted for mark to market, are those wash sales totally not deductible, if I buy an option towards near the end of the year(november), closed it, and not trade 30 days before and after, will that account for all of my wash sale so I only get tax on my net gains? I usually day trade options just being cautious on possible tax implications.
Glad you found this helpful. We discuss a little more about the rules with options in Lesson 2 th-cam.com/video/J8XLfE7OAyQ/w-d-xo.htmlfeature=shared You mention not seeing adjusted cost basis, I'm assuming you're looking at what your broker shows you? Brokers are not required to account for wash sales on substantially identical securities - so most only adjust on identical ticker. The IRS requires taxpayers to make additional adjustments. This opens up a lot of challenges and is one of the reasons options traders may use the TradeLog application. You can also check out our content here: tradelog.com/education/wash-sales-for-traders/#options. Lesson 3 of this series explains the tax implications of wash sales, when they impact your bottom line: th-cam.com/video/NtFj7aQZRBo/w-d-xo.htmlfeature=shared
I bought nvidia and sold at a lost. Then bought it back 1 week later where they added my lost to my cost basis and then sold again about a week after. I am now waiting 30 days. After those 30 days passed (in june 1st) if i buy nvidia again will they still add the lost to my cost basis or not anymore? What if I make sure to sell nvidia by November this year. Will I be able to claim that lost at the of the year?
It's hard to give any definitive answer without all details and full context of trading. But if you do not have a re-purchase of substantially identical securities within 30 days of the loss, then no wash sale can usually occur. As long as there was not an IRA wash sale adjustment, then the loss is realized in the tax year. While a broker may make some adjustments on their 1099-B reporting (and you may be able to see some tax adjustments through the year). They are not required to make comprehensive wash sale adjustments. TradeLog's reporting is independent of the 1099-B. TradeLog will use actual trade history and make comprehensive wash sale adjustments based on IRS rules for taxpayers. You can use the Free Trial of TradeLog to check out your trading year-to-date. The wash sale reporting can help you understand how the wash sales impact your bottom line. This is especially helpful in November/December as you plan year-end moves.
That is a strategy some traders use. Keep in mind some wash sale adjustments could be attached to positions held open at year end, which could defer losses. Of course many day traders elect Section 475f Trader Tax Status and use mark-to-market accounting method - in which case wash sales don't apply. You can learn more about that at: tradelog.com/education/trader-tax-status/
The wash stock rule is so inefficient. If my broker ever slip my limit order during settlement and I close an order a loss, It seems as if the only way to stop a wash stock cycle is to STOP TRADING that stock, or it's equivalent, for 31 days. ... Which is supper annoying. ... Sometimes I feel like Congress wants traders to swing trade or go long rather than day trade--lIke Nancy Pelosi.
Thank you. This is the best i have seen to explain this … great job. : ).
Wow -- big help. Thanks!!!
Thanks. My question is if I bought 100 shares at $100 and another 100 shares at $90 within 30 days, and then sold them at $95 together to break even for 0 gain or loss. Then is it qualified as wash sale for the first 100 shares which actually is a loss? I understanding is the "sale action" is 200 shares here and there is no loss or gain for it, so the first half of the sale is not considered wash sale.
Technically in this situation you have two trades: 100 shares sold at a loss of $500, and another 100 shares sold at a gain of $500. The IRS says to match up in this way (see tradelog.com/education/wash-sales-for-traders/#calculate)
The TradeLog application would match these trades accordingly, then would make a wash sale adjustment to the 100 shares bought at $90 (assuming that was within 30 days before the loss). Making that adjustment would move the loss from the first lot into the second lot. The net result is still a gain of zero $0. But we've made a wash sale adjustment as required. It might seem easier to just treat the whole lot as one trade with net zero, but TradeLog follows those IRS rules for unequal shares and creates the details for verifiable accuracy.
@@TradeLogLearning Thank you！ The net effect is the same but the details are different.
I don't get it, is "total wash sale loss disallowed" good or bad. Meaning is it good if it's 0 or 50,000
It sounds like you're describing the column on your 1099-B for "total wash sale loss disallowed", the problem is the 1099-B doesn't really tell you the whole picture. The total on the 1099-B is just a total of every adjustment the broker made. It may be that you closed out all the positions that were adjusted and realized the loss, or it may be some of those losses were deferred to the next tax year. Sadly 1099-B doesn't give you that info. If you're using TradeLog, the Wash Sale Details report breaks down how wash sales impact your bottom line.
It's usually bad when wash sales have increased your net taxable gain causing you to owe more taxes. Hope that helps/
@TradeLogLearning thanks, how do I use tradelog to use my 1099 and make a report, is that included in the 30 day trial?
TradeLog creates independent tax reporting with comprehensive wash sale adjustments, using your actual trade history and not the 1099-B. This is because of flaws with 1099-B reporting. See: tradelog.com/#broker-1099-b
You can learn more about how TradeLog works from our website, and even use our free trial to preview TradeLog results.
Thank you for the video. It's very helpful. However I'm in a situation with several lots bought on the same day. I sold the first lot accidentally and incurred a disallowed loss and an increased basis cost to my second lot of the same day. I'm planning to take a loss to offset some of my realized gain in the same account. So my question is: would I be able to claim a loss for tax purposes if I sell all of the positions acquired on the same day, in the same month? I do not plan to buy the same ETF again within the 60 day window. Thank you in advance for your help.
If you close all shares of a position then you've realized any attached wash sale adjustments. As long as you don't make a replacement trade within the 30 days after, you should avoid further wash sale adjustments.
Great info! Thank you
I understand the wash sale and adjusted cost basis for individual stocks, but how does it work with options? I don't see an adjusted cost basis when I sell for a loss and buy the options right away. Does it have to be same strike price? Or call/put? I'm not opted for mark to market, are those wash sales totally not deductible, if I buy an option towards near the end of the year(november), closed it, and not trade 30 days before and after, will that account for all of my wash sale so I only get tax on my net gains?
I usually day trade options just being cautious on possible tax implications.
Glad you found this helpful. We discuss a little more about the rules with options in Lesson 2 th-cam.com/video/J8XLfE7OAyQ/w-d-xo.htmlfeature=shared
You mention not seeing adjusted cost basis, I'm assuming you're looking at what your broker shows you? Brokers are not required to account for wash sales on substantially identical securities - so most only adjust on identical ticker. The IRS requires taxpayers to make additional adjustments. This opens up a lot of challenges and is one of the reasons options traders may use the TradeLog application. You can also check out our content here: tradelog.com/education/wash-sales-for-traders/#options.
Lesson 3 of this series explains the tax implications of wash sales, when they impact your bottom line: th-cam.com/video/NtFj7aQZRBo/w-d-xo.htmlfeature=shared
I bought nvidia and sold at a lost. Then bought it back 1 week later where they added my lost to my cost basis and then sold again about a week after. I am now waiting 30 days. After those 30 days passed (in june 1st) if i buy nvidia again will they still add the lost to my cost basis or not anymore? What if I make sure to sell nvidia by November this year. Will I be able to claim that lost at the of the year?
It's hard to give any definitive answer without all details and full context of trading. But if you do not have a re-purchase of substantially identical securities within 30 days of the loss, then no wash sale can usually occur. As long as there was not an IRA wash sale adjustment, then the loss is realized in the tax year.
While a broker may make some adjustments on their 1099-B reporting (and you may be able to see some tax adjustments through the year). They are not required to make comprehensive wash sale adjustments. TradeLog's reporting is independent of the 1099-B. TradeLog will use actual trade history and make comprehensive wash sale adjustments based on IRS rules for taxpayers.
You can use the Free Trial of TradeLog to check out your trading year-to-date. The wash sale reporting can help you understand how the wash sales impact your bottom line. This is especially helpful in November/December as you plan year-end moves.
So basically if you’re a day trader, all you really have to do is make sure all positions are closed, and try not to take loses in December?
That is a strategy some traders use. Keep in mind some wash sale adjustments could be attached to positions held open at year end, which could defer losses. Of course many day traders elect Section 475f Trader Tax Status and use mark-to-market accounting method - in which case wash sales don't apply. You can learn more about that at: tradelog.com/education/trader-tax-status/
The wash stock rule is so inefficient. If my broker ever slip my limit order during settlement and I close an order a loss, It seems as if the only way to stop a wash stock cycle is to STOP TRADING that stock, or it's equivalent, for 31 days. ... Which is supper annoying. ... Sometimes I feel like Congress wants traders to swing trade or go long rather than day trade--lIke Nancy Pelosi.