@AmyC ,
Please tell me if this seems to be correct (all contracts represent 100 shares, like standard option & are substantially similar):
2 TGT Option Contracts Sold on 12/16/22 at the same time
- 1 acquired on 8/19/22, sold for $1,177.68 loss
- 1 acquired on 11/16/22, sold for $159.67 loss
1 TGT Option Contract Sold on 12/23
- acquired on 12/05/22, sold for $70.67 loss
1 TGT Option Contract sold on 1/30/23
- acquired on 11/16/22, sold for $168.35 loss
Okay, the first two contact were sold together (2 contracts), which was sold first is unknown since sold together, so we have to start with the first acquired, which is 8/19/22. Based on wash sale rule, the 11/16 is a wash to that sell, but which one (either of the 11/16s or the 12/15)? Well, based on what I know, we have to go for first acquired, which is one of the 11/16s, looking on the intra-day activity, the 11/16 that was sold on 1/30 was bought FIRST; therefore, 1 contact on 8/19 sold on 12/16 is a wash sale to 1 contact bought on 11/16 and sold on 1/30 - that contact sold on 1/30 will take the date and loss from 8/19 sell as its basis, and will NOT be able to be recognized until 2023, assuming no more buys within 30 days before or after 1/30/23.
That leaves the OTHER 11/16 1 contract that was sold on 12/16, it will be a wash sale to the 1 contract bought on 12/5 due to the 12/5 being bought within 30 days after that sell. There have been no additional buys 30 days before or after 12/23, so it can be recognized on 2022 taxes. Still a wash sale and the 12/5 contact sell will take the date of the 11/16 that was sold 12/16 and the loss from that one added to basis.
That matches up both contacts and is done in proper order and chaining, correct?
In a nut shell, that means I will be able to recognized the $159.67 & $70.67 losses in 2022, but the $1,177.68 & $168.35 losses will have to wait until 2023.
Am I correct in all of this?
Thanks in advance!
M. Dillon Smith
