Investors & landlords

Let's summarize this:

  1. Trading stock can get complicated very quickly and is best handled with a tax professional that understands this area.
  2. Keep in mind that there are investors, traders (trader tax status TTS) and traders (TTS) with a valid Section 475 election.
  3. You indicate that you are a "trader" but are you a trader that qualifies for TTS is a key question.
  4. If a trader is eligible for TTS, then they are eligible to make a Section 475 election.  With a valid Section 475 election in place, the wash sale rules do not come into play.
  5. Other than item 4, all others are subject to the wash sale rules.
  6. A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you  "...acquire a contract or option to buy substantially identical stock or securities.."  Section 1091.
  7. So to address your specific question, "yes" you are affected by the wash sale rules unless you are an eligible TTS and have made a Section 475 election.  
  8. Not all is lost as the disallowed loss is adjusted on your other option purchases, but you need to meet with a tax professional who understand this area and can help you make the correct adjustments and reporting. 
  9. The other item to consider is maintaining a "Do Not Trade List" to help you avoid the wash sale rules.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.