Wash sale transactions

[bearkeley]

Mom has been ‘playing’ the market and accidentally triggered wash sales. Checking if anyone knows enough about this since internet search didn’t help much. It looks like if she simply sells the shares that triggered the wash sales by year end, then her adjusted cost basis cancels out her disallowed losses. Is this correct or is it not this simple?

 

[VanWinkle]

Mom has been ‘playing’ the market and accidentally triggered wash sales. Checking if anyone knows enough about this since internet search didn’t help much. It looks like if she simply sells the shares that triggered the wash sales by year end, then her adjusted cost basis cancels out her disallowed losses. Is this correct or is it not this simple?

Really no reason to sell the shares, as the wash sale amounts will be listed and can be adjusted on your tax return to disallow the loss for that wash sale amount.

 

[ERD50]

While you don't need to do it by year's end, it's kinda nice to do it and close it out in the same tax year. Then it's all tied up in a nice neat bow, nothing to have to consider later, and maybe forget about.

Hmmm, does the brokerage now track cost basis that is affected by wash sales? Maybe it's no big deal, but I'd want to double check their work.

-ERD50

 

[njhowie]

Hmmm, does the brokerage now track cost basis that is affected by wash sales? Maybe it's no big deal, but I'd want to double check their work.

-ERD50

Yes they do. Managing wash sale transactions is no effort if you use the download capabilities of Turbotax or other tax software. If you have wash sale transactions and have current open position(s) in any of the issues, you can see that the current cost basis on your positions screen is not going to be the same as the most recent purchase.