I have a tricky wash sale loss situation and need help, it involves wash sale between deep ITM option and stock.
1. I owned stock SHOP and sold a covered call. But as SHOP stock price increased, I bought back the call when it's deep in the money. This is a loss.
2. In the same time, I bought 100 SHOP stock.
1+ 2 --> becomes a wash sale of $1k.
3. After 30d of the buy action in 2), I sold the 100 SHOP stock at higher price, with 3k gain.
The problem is:
because of the wash sale loss deferral rule, I believe that the actual gain for the whole series should be 3k - 1k = 2k. But the tax form issued by Charles Schwab only noted my disallowed wash sale loss, but not the the adjusted gain. How should I fix this issue, asking Charles Schwab to correct it on 1099, or manual adjust cost basis on Turbotax?
Thanks,
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You can adjust the cost basis of 100 shares in Box Category "A" by
using code "B" and an adjustment of 1,000 in Column (g),
the broker is supposed to track all this for you.
You should discuss with the trade desk before assuming your 1099-B is incorrect.
For what it's worth,
I don't think TD ameritrade would mark this as a wash sale.
Schwab just bought TD ameritrade.
That doesn't help you here,
Thanks for the reply.
All trades happened in Charles Schwab (I don't have a TD account at all).
Schwab has already marked it as wash sale (that's how I learnt deep ITM option and stock can make a wash sale) .
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