Avoid Wash Sale on Different Brokerage Accounts

[catdelta]

Hi there,

I have built the positions of the same mutual fund in two of my brokerage accounts.  Last month, I liquidated all of them.  For the positions in Account #1, they all had gains.  For positions in Account #2, there were both realized gains and losses, but in aggregate, I still had a net gain on Account #2 only.

Today I re-purchased the same fund, a small amount in Account #1 and a large amount in Account #2.  Then I realized that the new position in Account #1 could trigger Wash Sale due to the loss of some positions in Account #2.

If I sell the whole position in Account #1 before the year end, would I avoid Wash Sale on this portion?

For the new position in Account #2, it is okay if it is Wash Sale as the new position is under the same account and the brokerage will report.  My liquidated positions in Account #1 all had gains so they do not  matter.

Thank you very much!

[Mike9241]

for wash sale purposes it is like you had only one account. Even though the losses occurred in account 2 if you purchase substantially identical securities in either account 30 days before or after the trade date of the loss sales the wash sale rules apply. This can even happen where a purchase is in a tax-deferred account during the 61-day period where the loss is in a taxable account

the wash sale is limited to the number of shares purchased in the wash sale period. So, if you sold 100 shares at a loss and during the wash sale period only bought 52 shares the wash sale only applies to 52 of those shares sold. 

if there is a wash sale selling those shares and not purchasing any during the 61-day period does not avoid applying the wash sale rules. basis of the shares purchased causing the wash sale are increased for the loss and their holding period is tacked on. What selling those shares and not retriggering the wash sale does is allow the loss to be recognized.  However, what can happen is that short-term can convert to long-term since the holding period is tacked on. 

Most likely you'll have to manually figure the wash sale reporting. I have never seen where a brokerage adjusts for wash sales where the loss is in one account and the purchase is in a different account. ask to make sure. 

[catdelta]

Hi there,

Many thanks to Mike for the answer.  I am updating my case here.

I have liquidated all the positions on this fund in my BOTH accounts before the end of Oct 2024.  Therefore,

1. All my gain/loss on this fund have been realized in 2024.

2. Even if I repurchase this fund at anytime in 2025 (though not yet) in any account, the new purchase would not trigger a wash sale.

In this situation, for my 2024 tax reporting, may I just calculate the gain/loss on this fund separately and then add together (the same way as if there was no wash sale)?

Thanks again!

[RobertB4444]

For 2024 there is no wash sale.  So you just calculate the gain/loss.  

@catdelta