Stock Sold at Loss, Will buying a Put Option Cause a Wash Sale?

Question

I sold 250 shares of a stock at a loss of (-1,000).  2 weeks later bought a single put contract (100 shares) n the same stock.  If I sell the put option for profit a few days later, is this a partial wash sale?  If so, how do I calculate it? (IRS)

Bob Baerker · Answer

A wash sale occurs when you realize a loss on a security and within 30 days before or after the closing date and you:

(1) Buy substantially identical stock or securities

(2) Acquire substantially identical stock or securities in a fully taxable trade

(3) Acquire a contract or option to buy substantially identical stock or securities

(3) would be applicable if you had purchased a call.  A put is a bet on price decline in the underlying whereas long the underlying is a bet on price increase.  They are not substantially identical so there is no wash sale potential.

Stock Sold at Loss, Will buying a Put Option Cause a Wash Sale?

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