I had a lot of wash sales this year, but I sold all of these securities prior to the year ending which I was told turns these unrealized losses or disallowed wash sales to be realized and allowed.
- A Wash sale is not a credit for losses, but rather is an increase in the basis.
- The unrealized loss is added to the basis of the underlying stock.
- Although the Wash sale is noted, it has no value. It's like a notation.
- When all of the underlying stock is sold, it's sold with an increased cost basis. This will ultimately result in a bigger loss or a smaller profit.
I might be getting the terminology wrong, sorry. With that said, do these wash sales now basically go away?
- Yes, if all of the underlying stock has been sold, and you've adhered to the 31-day rule.
I don't carry them on with me into 2023 correct and they won't show on my 2023 1099, right?
- As stated above, they will be gone if you've sold all the stock and adhere to the rules.
The wash sale rule prohibits taxpayers from claiming a loss on the sale or other disposition of a stock or securities if, within the 61-day period that begins 30 days before the sale (generally, the trade date) or other disposition, they: Acquire the same or a “substantially identical” stock or securities.
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