Wash sales

For many years, for IRS purposes, I'm a "trader in stocks and stock options," but not in futures. The implication is that for stocks & stock options, at end-of-year, those stock/option positions are mark-to-market. Thus, all unrealized P/L at end-of-year, are considered realized at the Dec 31st closing price.

Re stocks/options, that prevents any long-term gain, unless specifically noted in advance (probably via a separate account,) but on the plus side, it means wash sales do not apply.

With my accountant, we have adjusted end-of-year tax forms, because IB broker removes all wash sales. That is a nuisance, but not a major problem.

However, in daily trading the broker implementing wash sales, is a big issue.

For instance, assume recently I shorted a $40 stock, but immediately IB reflected the position as short at $33 -- thus showing an immediate $ 700 loss @ 100 shares.
[Note: this does not impact total account equity; only the Unrealized on this new position.}

They did that because I had traded that stock the prior days, at the $33 price range, and IB removed all the wash sales, leaving a position at $33.

As far as I can see, IB does not have an option to eliminate wash sales in daily trading. I understand, because otherwise it could reflect an inaccurate P/L per IRS rules.

Anybody know how to handle above? Any broker that has ability to eliminate wash sales in daily activity?

Thanks.

 

Even Etrade has a toggle and the toggle is defaulted to not think about wash sales.

 

Thanks. I've been hesitant to ask IB, not wanting to raise issue that would qualify me as "professional trader," as there are higher fees, and restrictions associated with that.

 

Why would someone default not to think about wash sales??

 

why would anyone think about wash sales not between Dec and Jan?

 

Per Trader Status with IRS, wash sales are ignored, and all positions are mark-to-market at the end of the year.

 

I think you are confused on what "professional trader" means. You are considered a pro if you are a registered rep and hold a FINRA license.

 

One is a regulatory distinction. The other is a tax distinction.

 

Or lease/own a seat/membership on a recognized exchange.
Or trade through an account TITLED in the name of a business entity.
Likely, there are some other triggers too.

 

There are different concepts of professional trader. In above context, I was just referring to some brokerage firms charging higher fees for data.

Proptrader23
Rather than basically accusing someone of being confused, you might just present the facts.

For the record, I've been an Exchange Member, a Registered rep, and held other SEC CFTC licenses over prior years.