Wash sale and adjusted basis reporting

[Cat-tirement]

In the past I have always avoided wash sale situations. Now I am considering an intentional wash sale but am not sure how it would be reported. I'm sure some of you have had experience with this.

Last week I sold some shares to book some LTCG, then immediately bought the same number of shares back again. As prices have continued down I was going to sell those shares again in the next week or so, then re-buy them soon after. This would all happen within the 30 day window. I will then hold those shares long term going forward.

I understand I can't take the loss for 2018, and expect it should be reported in the Wash Sale Loss Disallowed Box 1g on the 1099-B I receive next year. I also understand that the loss can be added to the cost basis of the repurchased shares.

In this situation, does the broker (Vanguard in my case) track that adjusted cost basis so it will be correctly reported to the IRS when I eventually sell the shares? If not, how would I report that basis in a future tax filing if it is different than what the broker reports?

Any insights are appreciated.

 

[LOL!]

Vanguard apparently tracks everything for clients when it comes to wash sales as shown in this bogleheads thread on the subject with an example:
https://www.bogleheads.org/forum/viewtopic.php?t=179414

 

[Sunset]

Why not buy something similar so you avoid the wash sale, and take the deductible loss.
Is it the FOMO that makes you think the existing stock will skyrocket up ?

 

[FIRE'd@51]

Have you considered selling at-the-money or out-of-the money puts with at least 31-days until expiration after you sell the stock? If the stock runs up you won't participate in the gain, but you will pocket the entire put premium, which may be substantial in today's high-VIX environment. Coupling the put premium with the tax benefit of taking a short-term capital loss in 2018 on the stock you re-purchased, will offset part (or all) of the risk of a stock run-up in the next 31 days.

 

[bingybear]

Why not buy something similar so you avoid the wash sale, and take the deductible loss.
Is it the FOMO that makes you think the existing stock will skyrocket up ?

this ^^^
OP, this is the way to capture a loss and keep holding something similar, but different enough.

With a wash sale the disallowed loss is added to the other shares, so you don't really book the loss.
Whatever you do, do not sell a position at a loss and repurchase in a IRA or similar account. If you sell at a loss in a taxable account and repurchase an IRA (or similar) within the bounds of a wash sale rules, you will technically reduced the basis in the IRA, but it never can be used.

 

[Cat-tirement]

Vanguard apparently tracks everything for clients when it comes to wash sales as shown in this bogleheads thread on the subject with an example:
https://www.bogleheads.org/forum/viewtopic.php?t=179414

That's a great reference - thanks!

 

[Cat-tirement]

Why not buy something similar so you avoid the wash sale, and take the deductible loss.
Is it the FOMO that makes you think the existing stock will skyrocket up ?

Not FOMO. I actually don't want to take any more loss this year, but if I can raise the basis for some future sale, that would be helpful.