I am a new trader, an active trader. I was not aware of the wash-sale rule. In my tax year, I had twice the losses compared to the profits and net capital losses on brokerage investments. But it turns out that my brokerage has reported most of those losses as wash sales, so only the profits are being taxed.
(For example, if you had made 100 K in profits and 200 K in losses only 100 K of your profits are taxed because 200K of losses are wash-sales, so you end up paying 35K odd taxes on your profits if you are paying income tax in that bracket and I feel those 200 K of losses are gone forever with nobody to remember this).
Net-net, I am paying an enormous tax bill even when I made capital losses. This is like a double hit on my finances. I am not a financial or tax professional, and trading was new to me. But I feel this is the right thing to do.
I am writing this discussion to ensure that new traders do not lose enormous amounts of their hard-earned money by trading. And as long as you have good paying job, I discourage trading. It is a very very high price to pay for the ignorance.
