effect of wash sale rule across multiple accounts

tiddlywinks said:
+1
Get flat the stock and don't trade the stock for 30 days starting sometime in December. Then you can essentially ignore this issue. If you do not do this, then you can expect your tax return to get very complicated.

...

At this point in the tax year, THIS IS THE CORRECT ANSWER! Kudos to sprstpd!!
Many CPAs and tax accountants, unless specialized, don't know that simple solution.
They don't really care either... Give em ALL your files, they'll gladly spend hours or days!

Between Thanksgiving and New Years (yes I know that's longer than necessary) flatten and do not trade those stocks, or substantially equivalent instruments. If you MUST trade, use that period to your advantage to grow.... look at different sectors, different trading instruments, different asset classes.

Remember too, business-trader tax status, if you qualify and properly elect such status, wash sale rules do not apply.
More...

Hi, thanks for contributing to this thread. I'm new to this, and just realized that I have the same problem - wash sales across more than one account. Could you clarify, what you mean by "get flat" in a security before December, and why does this solve the problem? My understanding that the wash sale loss can never be claimed as a loss.
 
eugene077 said:
Hi, thanks for contributing to this thread. I'm new to this, and just realized that I have the same problem - wash sales across more than one account. Could you clarify, what you mean by "get flat" in a security before December, and why does this solve the problem? My understanding that the wash sale loss can never be claimed as a loss.
More...
Nope, your gains and losses inside a year all net out. It's only an issue if it spans a year, since taxes are calculated on what happened in the previous year. Given that the law covers sales "ending 30 days after" the sale date, as long as your last sale was 30 days before the end of the year you'll never run afoul of the wash sale rule.
 
THanks; are you saying that if I sell all offending stocks at the end of the year, I can claim wash sale losses on my tax return, even though the brokerage tax statements will still clearly identify these sales with a "wash-sale-disallowed" flag???
 
eugene077 said:
THanks; are you saying that if I sell all offending stocks at the end of the year, I can claim wash sale losses on my tax return, even though the brokerage tax statements will still clearly identify these sales with a "wash-sale-disallowed" flag???
More...
No, that's not correct. We've said if you go flat (no long or short positions) 30 days before the end of the year, not at the end of the year, you can ignore the rule. That distinction is vital.
 
Sorry for not being clear. I plan to get flat on November 30th and not trade those securities any more until the following year. How/why does this allow me to claim wash sale losses for the year, which IRS seems to disallow?
 
eugene077 said:
Sorry for not being clear. I plan to get flat on November 30th and not trade those securities any more until the following year. How/why does this allow me to claim wash sale losses for the year, which IRS seems to disallow?
More...

If you are flat for 31 days (i.e., December), then you have broken the chain of wash sales at that point for every security that you are flat. Therefore, you will not be carrying a wash sale over from one year to the next. Therefore, you can safely assume that your tax calculations will be equivalent to the scenario where you had no wash sales for the year (even if you did have intra-year wash sales). As to how you want to report this, I would just follow your broker's 1099 statement. They might show wash sales intra-year but those wash sales will be accounted for properly by year end when you get flat. Either way, your tax results will be the same.
 
You must log in or register to reply here.
Back
Top