This is a confusing topic. This is the best explanation I've found. Thank you for keeping it simple, and yes ...... clear. A Schwab representative gave me a face to face, and actually confirmed what you taught me during a meeting. Hope you don't mind that I downloaded your presentation. Thanks. Mike
Question: if I sell an individual stock at a loss and then buy an ETF that contains that stock in 30 days before/after; will that trigger the wash sale rule? Thanks!
I'm not sure what you mean by choosing not to claim a loss. The rules state when a wash sale occurs you make an adjustment. The cost basis is adjusted for the replacement position triggering the wash sale. That adjusted cost basis is then used to determine if you have a taxable gain/loss on the subsequent position, irregardless of whether you had a realized profit. But if the adjusted position does result in a gain, then you don't have to worry about triggering additional wash sale deferrals. Ultimately: profitable trading reduces wash sale impacts.
Most people misread their 1099-B. If that $70k is the total for box 1g, then its jus the total of all the individual wash sale adjustments. It isn't necessarily the total amount disallowed/deferred. Some brokers calculate a taxable gain/loss after wash sale adjustments, some list it before wash sales. So you have to read your specific 1099-B carefully. In general to calculate total taxable gain/loss from a 1099-B you take column 1d (proceeds) - 1e (cost basis) + 1g (wash sales) = gain/loss. TradeLog will provide more understandable reporting including a detail of exactly how much wash sales are being deferred to the next tax year and your taxable versus actual gain/loss. Hope that helps!
@@TradeLogLearningthank you so much for your help! Is it possible to contact you (email or phone) regarding this. My Robinhood 1099 doesn’t show 1(d). I don’t think what my tax person is saying is true but would like to get your opinion on it.
@@Karan_Sanjeev support.tradelogsoftware.com/hc/en-us/requests/new You can send your 1099-B and our support team can answer basic questions. However, we do not provide tax advice. Our support is primary for TradeLog subscribers.
While you don't claim gains/losses in the IRA, a replacement position in an IRA can trigger a wash sale adjustment from a loss in the taxable account. The IRS says the loss is permanently disallowed. You can learn more here: tradelog.com/education/wash-sales-for-traders/#ira
i have a question about the washsale. I bought NVDA option four times in the last month. I made money on the first three times about 8000$ and on the last time I lost 3000$ . if I wait for 31 days would the 3000$ still consider as wash sale?
Hi, there isn't quite enough detail from your question. If you had a loss, then but had buys within 30 days before or after the loss, there could be a wash sale adjustment. So if you had 4 buys in the last month, and a loss when you sold some of those shares. Its possible shares bought previously could trigger a wash sale. You can sign up for a TradeLog Free Trial and either import the trades or even manually enter them to see the wash sale results. If you have no wash sale adjustments to the previous buys, then waiting 31 days after the loss to make another buy should prevent a wash sale adjustment. Of course, as we explain in lesson 3, you may not want to miss out on opportunities to make money as wash sales don't always hurt you. Check that out here: ruclips.net/video/NtFj7aQZRBo/видео.html
If I buy a stock ABC for $50 and sell it for $55 and make a profit, Then I buy it back again within 30 days for $45 or $60, then I sell it for $40 with a for a loss is that subject to the wash sale rule. Thanks great videos.
If there was a purchase of the substantially identical security within 30 days before or after the loss, then you have a wash sale. In your example you don't give the date of the loss in relation to the date of the previous purchase. It's possible the purchase of $50 triggers a wash sale, but all depends on the dates.
@@TradeLogLearning Elaborating on the previous question, let's say the first profit was on date T (1 shares of ABC bought at $50 and sold on the same day at $55). Then, 2 days later, on T + 2, we buy 1 share of ABC at $45 and sell it at $40 (same day again). I am guessing the second sale is a wash sale since we had bought the same security earlier within 30 day window. Will this be a permanent wash sale? I am not sure how cost basis can be adjusted in this case. so, do we need to pay capital gain on $5 and we can't adjust it against the loss of $5?
If the loss of $5 is considered a wash sale, then the cost basis of the replacement position is increased by $5. In your example, if the earlier trade is considered a replacement its adjusted for the wash sale, then the cost basis becomes $55, so the resulting G/L is zero. I'm not sure what you mean as "permanent wash sale". If both of these trades are in taxable accounts and both are closed in the same tax year, there is no impact on taxable gain/loss because both trades are closed and the net taxable gain is zero. The adjustment should be made in tax reporting, but it has no impact on your bottom line. Lessons 3 and 4 of this video series explain how wash sales can affect traders and how to take control. Wash sale adjustments are usually inevitable but we tell you what you need to watch out for.
This is a confusing topic. This is the best explanation I've found. Thank you for keeping it simple, and yes ...... clear. A Schwab representative gave me a face to face, and actually confirmed what you taught me during a meeting. Hope you don't mind that I downloaded your presentation. Thanks. Mike
Awesome, thank you!
Question: if I sell an individual stock at a loss and then buy an ETF that contains that stock in 30 days before/after; will that trigger the wash sale rule? Thanks!
ETFs are generally not considered "substantially identical" to a stock and therefore a wash sale would likely not be triggered in that scenario.
@@TradeLogLearning Thank you for your clarification!!!
What if trigger a wash sale and then I make a profit on the sale of the security that triggered it. Also I chose not to claim losses.
I'm not sure what you mean by choosing not to claim a loss. The rules state when a wash sale occurs you make an adjustment. The cost basis is adjusted for the replacement position triggering the wash sale. That adjusted cost basis is then used to determine if you have a taxable gain/loss on the subsequent position, irregardless of whether you had a realized profit. But if the adjusted position does result in a gain, then you don't have to worry about triggering additional wash sale deferrals. Ultimately: profitable trading reduces wash sale impacts.
Hi! I have a question, in my Robinhood statement, wash sale was $70k and gain/loss was ($2k). Will I be taxed on wash sale amount (federal and CA)?
Most people misread their 1099-B. If that $70k is the total for box 1g, then its jus the total of all the individual wash sale adjustments. It isn't necessarily the total amount disallowed/deferred.
Some brokers calculate a taxable gain/loss after wash sale adjustments, some list it before wash sales. So you have to read your specific 1099-B carefully.
In general to calculate total taxable gain/loss from a 1099-B you take column 1d (proceeds) - 1e (cost basis) + 1g (wash sales) = gain/loss.
TradeLog will provide more understandable reporting including a detail of exactly how much wash sales are being deferred to the next tax year and your taxable versus actual gain/loss.
Hope that helps!
@@TradeLogLearningthank you so much for your help! Is it possible to contact you (email or phone) regarding this. My Robinhood 1099 doesn’t show 1(d). I don’t think what my tax person is saying is true but would like to get your opinion on it.
@@Karan_Sanjeev support.tradelogsoftware.com/hc/en-us/requests/new
You can send your 1099-B and our support team can answer basic questions. However, we do not provide tax advice. Our support is primary for TradeLog subscribers.
@@TradeLogLearning ok thank you so much!
@@TradeLogLearning Just sent a message through support portal
How does a wash sale occur in a Roth IRA? I can’t claim losses anyway. And what if I don’t want to. Is it that big a deal?
While you don't claim gains/losses in the IRA, a replacement position in an IRA can trigger a wash sale adjustment from a loss in the taxable account. The IRS says the loss is permanently disallowed. You can learn more here: tradelog.com/education/wash-sales-for-traders/#ira
i have a question about the washsale. I bought NVDA option four times in the last month. I made money on the first three times about 8000$ and on the last time I lost 3000$ . if I wait for 31 days would the 3000$ still consider as wash sale?
Hi, there isn't quite enough detail from your question. If you had a loss, then but had buys within 30 days before or after the loss, there could be a wash sale adjustment. So if you had 4 buys in the last month, and a loss when you sold some of those shares. Its possible shares bought previously could trigger a wash sale. You can sign up for a TradeLog Free Trial and either import the trades or even manually enter them to see the wash sale results.
If you have no wash sale adjustments to the previous buys, then waiting 31 days after the loss to make another buy should prevent a wash sale adjustment. Of course, as we explain in lesson 3, you may not want to miss out on opportunities to make money as wash sales don't always hurt you. Check that out here: ruclips.net/video/NtFj7aQZRBo/видео.html
Thank you
If I buy a stock ABC for $50 and sell it for $55 and make a profit, Then I buy it back again within 30 days for $45 or $60, then I sell it for $40 with a for a loss is that subject to the wash sale rule. Thanks great videos.
If there was a purchase of the substantially identical security within 30 days before or after the loss, then you have a wash sale. In your example you don't give the date of the loss in relation to the date of the previous purchase. It's possible the purchase of $50 triggers a wash sale, but all depends on the dates.
@@TradeLogLearning Elaborating on the previous question, let's say the first profit was on date T (1 shares of ABC bought at $50 and sold on the same day at $55). Then, 2 days later, on T + 2, we buy 1 share of ABC at $45 and sell it at $40 (same day again). I am guessing the second sale is a wash sale since we had bought the same security earlier within 30 day window. Will this be a permanent wash sale? I am not sure how cost basis can be adjusted in this case. so, do we need to pay capital gain on $5 and we can't adjust it against the loss of $5?
If the loss of $5 is considered a wash sale, then the cost basis of the replacement position is increased by $5. In your example, if the earlier trade is considered a replacement its adjusted for the wash sale, then the cost basis becomes $55, so the resulting G/L is zero.
I'm not sure what you mean as "permanent wash sale". If both of these trades are in taxable accounts and both are closed in the same tax year, there is no impact on taxable gain/loss because both trades are closed and the net taxable gain is zero. The adjustment should be made in tax reporting, but it has no impact on your bottom line.
Lessons 3 and 4 of this video series explain how wash sales can affect traders and how to take control. Wash sale adjustments are usually inevitable but we tell you what you need to watch out for.
Still don't understand and even more confuse to me🧐🧐