Lets Talk Wash Sales

dmillz

Member
VIP
I keep reading about wash sales, I have numerous Wash sales that account for 60k. A lot of these wash sales where placed in July / August... They still show up in my over wash sales total on my 1099 form. People keep saying that if you dont trade the month of December 31 days... those wash sales fall off, but i am seeing them in my statement from july august sept... So throughout the year if i Incur wash sales they are permanent? Im in a taxable account. Thanks
 
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XeoNoX

Well-known member
VIP
Please consult a CPA or certified tax professional, dont go to H&R Block, paying a good professional CPA thats reputable can save you more than you think. If you dont know one or know anyone that knows one you can simply look online in your area and then call and ask the CPA a few tax questions relating to stocks that you know the answer to and see if they know it off the top of their head, if they dont have time for you or dont know then that means they arent worth your time and call another. You may even possibly call them and ask them how a wash sales works, this should be free quick advice, some will try to make you "come in" to see them, once again if its just a few questions that take less than 5 mins and they cant answer for free its not worth your time and move on to the next CPA/Tax Professional... Call about 20 of them and score them on a piece of paper, look up their reviews online as well. For basic taxes with stocks should be around $150-$250 fair price... if you have property and other assets and businesses or 1099s it may be more. You may think calling 20 CPA is extreme, but this is your hard earned money, and if you make a significant amount of money you should be trying to save a much as possible and need a excellent CPA... only you can protect and help save yourself money, however you have to put in the time to do so.

Do not take the following as advice however my interpretation is Tax lot and tax method when you signed up can make a difference, such as first in first out or first in last out , etc... If your accounting does basic total capital gains along with method short term holds (less than 12 months) it wont really matter, if you are trying to account for a asset/security in which you held over 12 months to get the tax break then wash sale would matter and the tax method you chose would matter. It can get more complicated, but this covers what i assume most people get confused/worried about. Once again this is not tax advice, this is simply my interpretation, so i advise you to seek a professional.
 
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scott69

Member
There is much literature from the IRS, the ultimate judge, on this subject. Also, if your broker is reporting this to you, they are also reporting it to the IRS. Your tax return must agree with this report or you will be audited. Saying this from experience.Good luck.
 

dmillz

Member
VIP
I got it worked out peeps, Your Wash sales basically go into your cost basis after 30 days. So The math works out. I Have a good CPA but crazy how these wash sales arent really spoken about until the 1099-B comes LOL My advice to anyone is to not trade the last 31 days of the year and your wash sales will essentially wash away...
 

XeoNoX

Well-known member
VIP
I got it worked out peeps, Your Wash sales basically go into your cost basis after 30 days. So The math works out. I Have a good CPA but crazy how these wash sales arent really spoken about until the 1099-B comes LOL My advice to anyone is to not trade the last 31 days of the year and your wash sales will essentially wash away...
that advice is subjectable, for instance that could possibly be a bad idea for a day trader or someone who just uses short term capital gain method. In the end wash sales are really subjectable and varies to BOTH the person's trading strategy and tax strategy. Once again a good CPA would be able to do the math and tell you what's in your best interest.
 
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