Trading Broker fees/Tax/Washsale/Please advice.......

Quote from fishtrader:

Still confused.

Ok lets make it plain and simple.

Let's say for the whole year of 2010.

I trade BAC for hundreds of trades,
I made money on my wins = $100,000.

I lose money on my loses = $40,000.

So I finally made a profit = $60,000.
(forget about the commissions)

So do I pay tax based on the $100,000 that i win (wash sale rule)?

Or do I pay tax on my profit $60,000???

Just make it simple. forget about the forms and and all the complicate stuff.

Does the wash sale apply to me? If it doesn't then why have the MTM for? Why should I care about it?

But if the wash sale rule applies to me, then this whole thing is absurd. Because I wasn't qualified for the MTM for 2010.

Plz advice......
More...
you pay tax on 60k. the record keeping paperwork concerning wash sales will apply to you but since you made a profit you should not have a wash sale violation.
 
Thanks Free Thinker.

Some months I trade so frequently. But at the end of the month I ended up making only less than 1 point.

Think about it how frustrated it is. Sometimes I win 12 points and lose 11 points for that month, ended up making profit only 1 point.

If I would have to pay tax based on my wins of 12 points, then it would be horrible. My tax guy didn't really know anything about it.

Anyway...Thks all for your advice.
 
Quote from Free Thinker:

you pay tax on 60k. the record keeping paperwork concerning wash sales will apply to you but since you made a profit you should not have a wash sale violation.
More...

I think it depends on the chronological order of his trades. There could be losses at the end of the year that don't get wiped out by profitable trades. In the end, the only way you can tell is by using a wash sale calculator (like Tradelog or there is a free one at Offwall.com).
 
Quote from fishtrader:

Just wanna share another topic on my experience.

During the last 2 weeks I traded BAC for 80 trades (both enter and exit). I made a total of

Wins $5880
Lost $2160

Overall I made $3720

My Commissions on bundled with IB was $1200
(80 trades x 3000 shares per trade (comm = 0.005))

So I ended up making $3720 - $1200 = $2520

I'm thinking at the end of the year (only for these 80 trades that I made) because of the wash sale rule. I would have to pay tax on my gains which is

Gained $5880 x 35%tax = $2058

So I will be making only

$2520 - $2058 = $462 ????????????????

People tell my to consult with my Account. Which I did already.

All the commissions/tax really bothers me.

I did all the consultant with my account already.

That is i'm subject to the wash sale rule. I do make many points on my trading but this wash sale really kills me.

I'm wondering all you traders here posting your gains making $50,000 - $70,000 ytd but how about your wash sale tax???

You will all be eat up. It's really simple. I did let my accountant elect me as a MTM but i'm still not qualified as a day trader. I need to proof more another year. Well, another year is a lot for all of my money to be burned by this stupid wash sale rule!!!

For my commissions, I think I will chg from IB to another broker - a flat fee commission. Maybe MBT or OEConey which I do have a small amount of money with MBT but I don't really like their execution but have no choice. I've calculate the fees on unbundled for IB already, the exchange fees still hurts me a lot.

Anybody have any advice????????
More...

You will only be taxed at 2520, if those are the only transactions for the year. Wash sale rule has no effect since you have a net profit. And you will not be taxed at 35% but rather based on your tax bracket. Short-term capital gains are taxed as ordinary income.
 
Quote from TakeAChance:

You will only be taxed at 2520, if those are the only transactions for the year. Wash sale rule has no effect since you have a net profit. And you will not be taxed at 35% but rather based on your tax bracket. Short-term capital gains are taxed as ordinary income.
More...

Thanks TakeAChance,

My question is very straight forward with an example.
All I need is a straight forward answer, either yes or no with
a explanation. Which that is what you gave me. I've seen in another
forum about this topic and there wasn't any clear answer at all. Just
running around the bush with some links but with no clear answer.

Thanks again
 
Quote from Scataphagos:

Simple rules of thumb...



2. As long as your final trade of the year in that stock is a winner (even if only for $.01), wash sale losses are negated... as you get to add your losses from prior trades to the cost basis of future trades. Also... let's say you've got a big string of losers and are concerned about wash sale rules not allowing you to take the losses for this tax year..... and it's December. So long as you have ONE trade in December... say, Dec. 15, which is a winner... and the size of the trade is enough account for all of your wash sale losses, all of the losses before that trade will be allowed for this year. If you go back to a big string of losses again, the only wash sale losses you need to be concerned about are the ones which occurred after Dec 15.



A lot of inconvenience for some for no overall consequence. The Wash Sale laws should be repealed.
More...

Cool..! Got it...!!!
 
The best thing to do if one is worried about this idiotic wash sale rule is simply to not make a single trade in the month of December.

Someone please advise if I am correct.
 
You must log in or register to reply here.
Back
Top