topic Do washsale rules apply if all positioned are closed before end of year? in Investors & landlords

Do washsale rules apply if all positioned are closed before end of year?

InvisibleCrow — Fri, 27 Dec 2024 18:16:43 GMT

As posted in subject... my understanding is that wash sales is really applies to losses on securities that are repurchased with 31 days. I have similar situation where I purchased an ETF in Oct 2024 and sold for a loss in Nov. I then repurchased the same ETF on Dec 20th (within the 30 day). So right now the loss from Nov close is added to cost basis for Dec 20th purchase.

* Am I right in thinking that if I sell all of that ETF share positions before Dec 31st, the wash sale rule won't apply because all my profit/losses would have settled?

* Are there any additional considerations on purchases of same security in the new year? (I don't plan on doing that but figured it could be helpful to wider audience).

Re: Do washsale rules apply if all positioned are closed before end of year?

Mike9241 — Fri, 27 Dec 2024 20:27:51 GMT

the wash sale rules still apply but because all the positions were closed by the end of the year the wash sale losses are allowed. 2 caveats. 1) a security sold at a loss at the end of the year with a settlement date in 2025 is not recognized until 2025. 2) even though all the positions are closed by 12/31/2024 any purchase of substantially identical securities In January 2025 within the 31 days of the 2024 sale will trigger a wash sale if the 2024 sale was at a loss.

Re: Do washsale rules apply if all positioned are closed before end of year?

fanfare — Fri, 27 Dec 2024 20:41:44 GMT

closing all your position(s) does not absolve you of the IRS requirement to detail on Form 8949 all transactions with adjustments.

@InvisibleCrow

Re: Do washsale rules apply if all positioned are closed before end of year?

InvisibleCrow — Fri, 27 Dec 2024 20:54:31 GMT

@fanfare - Doesn't Turbotax take the fill 8949 based information one enters from 1099B which includes cost basis and sales proceeds info?

Re: Do washsale rules apply if all positioned are closed before end of year?

fanfare — Fri, 27 Dec 2024 21:20:31 GMT

wash sale details also include the adjustment.

If you import your 1099-B the adjustment will appear in Col(g).