They’re a couple good ones around, I’ll chime in if you want to start a thread about it.
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Wash sales
- Thread starter invortex
- Start date
They’re a couple good ones around, I’ll chime in if you want to start a thread about it.
Thank you for this information. I currently have a loss of 17K in SOXL and it is a wash sale. I am thinking the stock will go up in Jan, so no need to sell now. But I wont be able to take my loss this year and have to defer my losses to next year, correct?
Here's what you do. Sell SOXL now to take the loss this year. At the same time, buy a 3x larger position in SOXX. Option 2, sell your SOXL to take a loss this year. At the same time, short some deep in the money puts on SOXL that won't expire until at least 31 days (or 2 - 3 months just to be safe) from now. Check with your tax advisor regarding option 2 and let me know what he thinks. So far, IB doesn't think that it violates any wash sale rules in my case.
They’re a couple good ones around, I’ll chime in if you want to start a thread about it.
I did find a thread about taxation and CPA's. None were in NYC if that is relevant?
I did find a thread about taxation and CPA's. None were in NYC if that is relevant?
I’m thousands of miles away from NYC,
I was referring to firms in general, both nationally and international.
Here's what you do. Sell SOXL now to take the loss this year. At the same time, buy a 3x larger position in SOXX. Option 2, sell your SOXL to take a loss this year. At the same time, short some deep in the money puts on SOXL that won't expire until at least 31 days (or 2 - 3 months just to be safe) from now. Check with your tax advisor regarding option 2 and let me know what he thinks. So far, IB doesn't think that it violates any wash sale rules in my case.
My accountants were very clear that the 31 days to won't avoid a wash sale. Other research indicates that the ditm will qualify as substantially similar.
My accountants were very clear that the 31 days to won't avoid a wash sale. Other research indicates that the ditm will qualify as substantially similar.
Getting flat for 31 days does not technically avoid the wash sale, but if you do it across a year boundary (i.e., December to January), then you can effectively ignore the wash sale for tax calculations.
Getting flat for 31 days does not technically avoid the wash sale, but if you do it across a year boundary (i.e., December to January), then you can effectively ignore the wash sale for tax calculations.
Can you elaborate?
Thank you for this information. I currently have a loss of 17K in SOXL and it is a wash sale. I am thinking the stock will go up in Jan, so no need to sell now. But I wont be able to take my loss this year and have to defer my losses to next year, correct?
If you take the loss on the position now, you will have to wait 31 days before re- opening it. otherwise, the loss will not be deductible this on this year's taxes. With equities, there is no prohibition against taking a similar position in a different equity. I don't know if this applies to ETFs which may have similar component positions. Is this substantially identical? Anyone?
I would no get tax advice from anyone other than a tax professional that is experienced with traders taxes... Just make sure to screen them out over the phone first by asking them a few wash sales rules, the good ones will gladly answer your questions and the bad ones will show their cards right away by declining to answer or by giving the wrong answers.
One calls a tax trading expert to get professional advice on a problematic filing issue but you can screen a bad one out who gives a wrong answers? Most investors/traders don't have a clue about the depths of wash sale rules and if the guy answers a few gimmees over the phone, that does not mean he'll provide the correct solution to your problem. AFAIC, a recommendation from a fellow trader or trusted advisor (lawyer, accountant) is the best way to go.