Hi Intuit TT community - I'm going to Pile On this discussion, as I also have questions about Robinhood's assessment of wash sale disallowed designation on the 1099B. For those whose advice is to go hire a good tax accountant to take care of this, I would say that we use TT because we think we should be able to understand and do our taxes ourselves. And echoing others' comments here, if I'm going to sign the return I need to know it's correct, whether that means trusting RH or a good tax accountant.
Generically, my questions are in two parts:
1) Is there a definitive list of rules that describe the wash sale rules as applied to stocks and options specific enough to follow? I've read the IRS pubs on this ("substantially identical" and "consider all the facts and circumstances in your particular case") and find the instructions lacking. I've read as much interpretation discussion as I can (is there a "replacement purchase" matching the prospective wash sale / loss transaction) and again don't have a rule in hand.
2) If I decide that RH has made a mistake and they won't correct it, what steps do I have to take in TT to adjust and document this?
I'll throw in one of my specific examples that I believe RH is flagging as a wash but is not clear to me should be. Consider the following series of trades, assume everything is in the +/- 30 day window and for the purposes of discussion the options have the same expiration date:
- Buy NVDA 200 Calls $800
- Sell NVDA 200 Calls $500 [loss of $300]
- Buy NVDA 190 Calls $800
- Sell NVDA 190 Calls $1500 [gain of $700]
- Buy 2 shares NVDA $400
RH seems to be flagging the $300 loss as a wash sale, I think because of the 2 share purchase within the window. I would claim that the 190 Calls were the "replacement securities" for the loss sale of the 200 Calls, and that when I sold the 190 Calls, the wash sale resolved. I'm still digging through the 1099, but I think there are situations where the share purchase came before the options transactions instead of after, but still in the +/- 30 day window, and again it was flagged.
I do realize I'm asking a tax question on a software support community discussion thread, but it's clear that there is a lot of general interest in this community regarding these wash-sale related tax questions, and subsequently how to make the appropriate adjustments in TT if you're stuck with a broker 1099 you don't agree with.
Thanks,
William
