All “losses” are wash sale correct?

[IndyJonerJr]

hi guys,

I wonder reading on wash sales.. all short term options ( under a month ) would result in a wash sale if you say closed whatever you had and sold for a loss? Is that correct in my thinking?

From what I understand you can’t purchase an option under 30 days and it be considered a tax loss correct

So for example. I usually “stage” my put selling say I’ll pick some up on Monday then on Tuesday. If the market freaks and drops a little I might pick some up more on Wednesday... the problem
Here is buying on multiple days correct? Because the rule states nothing before or after 30 days so I’m doing that I would trigger the wash sale staging that out right, meaning I bought it before 30 days meaning it would automatically make a wash sale???

I guess my question is two questions. As is it a wash sale if you only sell options on one day then say incur a loss / and the other would be the staging that I usually do.

Thanka for any info

 

[Stocktracker]

I believe, if you buy identical stock or options contract within the 30 days period, then the answer is yes.
https://www.sec.gov/answers/wash.htm

 

[spindr0]

... all short term options ( under a month ) would result in a wash sale if you say closed whatever you had and sold for a loss?

From what I understand you can’t purchase an option under 30 days and it be considered a tax loss correctIs buying on multiple days correct?

Because the rule states nothing before or after 30 days so I’m doing that I would trigger the wash sale staging that out right, meaning I bought it before 30 days meaning it would automatically make a wash sale???

How long the option has until expiration has nothing to do with a wash sale.

Booking a loss does not create a wash sale. Buying "substantially identical" securities within 30 days (before or after) booking a loss creates a wash sale. The same holds true for shorting except that it's STO then BTC and another STO within the 60 day window creates a wash sale.

All of this is irrelevant if all positions are closed out by the end of the year and 30 days passes.

 

[lindq]

Thanks for any info

The wash sale rule was put into place mainly to prevent investors from selling a losing asset towards the end of the year so that they could book a tax loss for the year...then buying the same or similar asset at the start of the next year.

It makes sense that the IRS would want to put an end to that game. But it doesn't have much impact on short term traders, so long as you're careful with your positions at the end of the year so as not to trigger an inquiry.