Wash Sale Question with Robinhood

[keeblenguyen]

   I'm day trading with RH and My very first trade on Stock A made 40K profit. Then, I start trading on Stock B and keep buy/sell over and over again (please see below). Now I realized i have been hit by wash sales alot on same security (Stock B). After calculate all trade of stock B, total lost -5554 ( gain 4200 - lost 9754 = -5554). So with wash sale rule. I cannot claim my lost of -5554 for stock B right? and this lost will add up to my 40K profit to be 45554 and I will be pay 32% tax on short term investment of total 45554 ????  Please help. Thank you.  

11-9-2021: Buy 97 shares @ 1075 
11-9-2021: Sell 97 shares @ 1012 (lost 6080) 

11-24-2021: Buy 46 shares @ 1070
11-24-2021: Sell 46 shares @ 1132 (gain 1940)

11-26-2021: Buy 50 shares @ 1085
11-26-2021: Sell 50 shares @ 1090 (gain 300)

11-26-2021: Buy 50 shares @ 1085
11-29-2021: Sell 50 shares @ 1112 (gain 1400)

12-02-2021: Buy 70 shares @ 1075
12-02-2021: Sell 70 shares @ 1083 (gain 560)

12-09-2021: Buy 78 shares @ 1035
12-10-2021: Sell 78 shares @ 1000 (lost 2730)

12-16-2021: Buy 83 shares @ 932
12-17-2021: Sell 83 shares @ 920 ( lost 944)

[Critter-3]

Just STOP buying stock B for at least 31 days.  If you do then all the wash sale losses will be released.

[Mike9241]

you didn't provide dates and I won't do the math for you.  however, if you had a $40K gain on A and the wash sale rules eliminate any deduction for the losses on B. your taxable income from A & B sales will only be A - $40K. 

[Opus 17]

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@Critter-3 wrote:

Just STOP buying stock B for at least 31 days.  If you do then all the wash sale losses will be released.

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Too late for 2021 though?  

[Critter-3]

Nope ... the broker has until mid February to put out the 1099-B and in that time  they look for wash sales  to adjust basis ... if the original poster would just STOP buying the B stock for 31 days all the prior unallowed wash sales would be released.  

[Opus 17]

Not sure where you got 32% income tax.  Short term capital gains are taxed as ordinary income.  It could be 32%, depending on your total income and filing status, but it could be anywhere from 10% to 37%.  You will also pay state income tax between zero and 13% depending on your state and your total income.   You could also pay 3.8% net investment income tax depending on your total income.

Tax brackets

https://taxfoundation.org/2021-tax-brackets/

Net investment tax

https://www.irs.gov/individuals/net-investment-income-tax

[fanfare]

"Nope ... the broker has until mid February to put out the 1099-B and in that time  they look for wash sales  to adjust basis "

It's not going to happen that way.

because for active traders wash sales often roll forward into the most recent transactions,

the only way to release 100% of wash sale losses for tax year 2021 is to close the positions by end of the year.

It's necessary but not sufficient to then pause for 31 days

also it is necessary to have avoided buying within 30 days prior to closing out transactions with losses.

[fanfare]

a triggering buy captures the disallowed loss of a wash sale and that's deductible only when that triggering buy is sold without being itself a wash sale. This could be years later, or never.

[keeblenguyen]

 Thank you for replying. I just update the date of each transaction. 

[Critter-3]

My original answer stands ... DON'T buy it again until 31 days after the last sale. 

[keeblenguyen]

  Also. On form 1099B that sent out from RH. To Know how much your capital gain or loss. look like we use the Proceeds (1d) - Cost Basic (1e) + Wash Sale loss disallowed (1g) = Capital gain or Loss. Then we will pay tax base on gain or loss right?

 For example:

 Proceeds (1d)       Cost basic (1d)          Wash Sale Disallowed (1e)     Net gain or loss

1124487.33            1175947.36               52664.21                                   1204.18

 So I will pay tax on $1204.18 ? or have to pay tax for $52664.21 + $1204.18 = $53868.39

*** For turbo tax: after I upload the 1099B From RH. If all my wash sales transaction with W code are correct on 1099B. Do I have to manually report each transaction to form 8949 ? or after upload 1099B Turbo Tax will take care the rest? Thank you so much guys

[EMC1225]

On 1099-b what is the Adjustment Code for wash sales.  On Fidelity 1099b the wash sale disallowed is a positive number. Should it be positive or negative in the Turbo tax box.  

[fanfare]

Column (g) is a positive number, when added to your loss it reduces your net loss