If a Wash-Sale position is closed for the year can that full loss be claimed on taxes?

[msq123]

I bought 3 put options in 2 trades on two consecutive days and then sold them a week later on same day as 2 trades for $0.01 (day before it expired). My broker reports first of these losses as a Wash-Sale. Cutting my losses I can take on my taxes by half - simply as I bought this position as 2 trades and sold as 2 trades! 

Is there any way around this? Can I claim the entire loss as I never held that position for the rest of the year (I could not as that option expired, so I could not have!)

Sep 8 - Buy 3 Puts Cost $334.48     
Sep 9 - Buy 3 Puts Cost $398.48
Oct 6 10am - Sell 3 Puts for $19.22 (Broker marks as $315.26 loss as wash sale)
Oct 6 11am - Sell 3 Puts for $19.22 (Broker say loss $594.51)

So what happens to my $315.26 Was-sale disallowed above? Am I to carry it to next tax year?

[TomYoung · Accepted solution]

Either the broker's math isn't good, or you've made a typo, or something else is affecting things that you haven't mentioned here.

Assuming this is all the activity in these particular puts that you engaged in in 2015 then your overall loss is

$334.98 + 398.48 - ($19.22 x 2) = $694.52.

A wash sale loss on a trade is a deferred loss.  That deferred loss is ADDED to the "purchase price" basis of the replacement security.

So the first trade gets reported as a "no gain/no loss" trade.

The second trade gets reported as $19.22 - $713.74 = $694.52

That's all there is to it.

Tom Young

[toh]

Thanks Tom. So if I close out the positions related to the wash-sale and do not purchase any additional replacement securities, will the wash-sale disallowed amount forever go to a smoke? Is there no way to capitalize on the loss at all?

[Anonymous]

when there is a wash sale the amount of that loss is added to the cost basis of the shares/option contracts that caused the wash sale

either you gave us bad numbers, the broker's computers are malfunctioning or you omitted something

paid 334.48+398.48=732.96      (after wash sales cost basis of second lot is 713.74 -  398.48+315.26)

sold  19.22+19.22=38.44   (disallowed loss on first sale  334.98-19.22 =315.26

total allowed loss should be 694.52  (sale of second lot 713.74-19.22= 694.52

you gave us    a loss of 594.51

so there's a $100 difference somewhere.   

[Diane3]

Diane3

Returning Member

20 seconds ago

 

I traded options and believe had several wash sales. Does it matter if they're puts or calls or sell to close or expired? Is it possible they're not wash sales as wash sales are not indicated on my 1099-B? If they are indeed wash sales can you please tell me to which lot I carryover my disallowed losses to?

XYZ

purchased   quantity   sold      gain/loss

6/12                1              6/12      $39

various            2             6/19      $-119

6/23                1              6/23      $4

6/24                1              6/24      $9

6/24                1              6/26      $-14

6/29                1              6/30      $15

all sold, never repurchased again.

Also curious about the above post..if her last trade was technically also a wash sale, do you just not report it as such with a W in that column of 8949 since she didn't purchase any more to carry her disallowed loss to and then it's all added to that basis so put a B in that column of 8949?

[Diane3]

I traded options and believe had several wash sales. Does it matter if they're puts or calls or sell to close or expired? Is it possible they're not wash sales as wash sales are not indicated on my 1099-B? If they are indeed wash sales can you please tell me to which lot I carryover my disallowed losses to?

XYZ

purchased   quantity   sold      gain/loss

6/12                1              6/12      $39

various            2             6/19      $-119

6/23                1              6/23      $4

6/24                1              6/24      $9

6/24                1              6/26      $-14

6/29                1              6/30      $15

all sold, never repurchased again.

Also curious about the above post..if her last trade was technically also a wash sale, do you just not report it as such with a W in that column of 8949 since she didn't purchase any more to carry her disallowed loss to and then it's all added to that basis so put a B in that column of 8949?