I have been trading quite often this year. I plan to do even more trading next year. I have exclusively trade options on SPY, QQQ, and DIA. I buy calls and puts everyday (sometimes multiple times a day i.e. pattern day trader) and later on the same day sell them, of course sometimes for a profit and sometimes for a loss. I end every day at market close with no open positions.
I realize I am flagging wash sales all year long. I also realize that those losses are changing my cost basis and are more or less deferring those losses. Please correct me if I am wrong about those assumptions. I do plan to stop trading in the month of November just to try and get credit for losses for the year. The part that worries me is that in the wash sale rule it states "30 days prior", so even if I stop trading on any specific day in November, and even though I don't buy any more through the year I still bought some in the days leading up to my final trading day of the year in November that would definitely be considered a purchase within 30 days. And I am worried that this might cause problems for me (such as all wash sales being disallowed, or otherwise just not able to realize these losses at year end come time for taxes). I am not interested in changing my accounting method at this time, and I am not interested in changing my status to Tax Trader Status.
So my questions is, if I day trade options, intraday all year long, flagging wash sales everyday until November the 23rd (note: I was trading everyday until that point, hence my concern with the 30 days prior) and then just close everything at the end of the day and don't trade anymore until January the 10th, what will be the tax ramifications of that? Will I still be able to realize or otherwise get credit for my losses throughout the year?
