Personal Finance & Money Asked by Spasski on April 8, 2021
Here is my simplified wash sale scenario.
Let’s say I traded only 2 stocks last year:
Txns for XYZ:
Txns for stock ABC:
If I disregard the wash sale rule, my tax gains for the year should be +500$.
But my broker reports a wash sale disallowed in field 1g on 1099-B and sets the loss for XYZ to the year at 0. Here is the report
1a. 1b 1c 1d. 1e. 1g Wash Sale Disallowed Gain or Loss
XYZ 100 05/28/19 09/02/20 1000 2000 **1000** **0.00**
And now I have to pay taxes on +1000$ gains for the year instead of just +500.
What should I do?
If the replacement shares for a wash sale are closed in the same tax year as the realized loss and there is no subsequent wash sale violation, you have a lot of tax accounting adjustments but the total loss can be deducted in that tax year. It's only a problem if the replacement share position isn't closed in that tax year and therefore the apportioned wash sale violation cannot be deducted until the next tax year, assuming no additional wash sales that further delay deducting the loss.
You've posted your broker's wash sale explanation for the 100 shares sold on 9/02/20. It is correct. But where is their accounting for the replacement shares sold on 11/02/20?
Answered by Bob Baerker on April 8, 2021
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