Burned on TSLA Put, please help me understand wash sale rule

Discussion in 'Options' started by sepidpooy, Dec 18, 2020.

  1. Also note, even with a disallowed wash sale you just add to the basis for the trades and take the loss next TY. So really, no big deal anyway. You don't lose the tax loss forever.
     
    #11     Dec 18, 2020
  2. danielc1

    danielc1

    Indeed, I described the naked call. Good that there are others on the forum to correct it.
     
    #12     Dec 18, 2020
  3. S2007S

    S2007S

    There will be a day when shorting tesla will mint you a MILLIONAIRE!!!!!!!!!
     
    #13     Dec 18, 2020
  4. lindq

    lindq

    You'll pay taxes on your closed trades for the year.
     
    #14     Dec 18, 2020
    sepidpooy likes this.
  5. Sig

    Sig

    Just to reinforce this, if you don't buy or sell ANY TSLA options for the first 30 days of Jan you won't be subject to any wash sale rules. You could also refrain from trading for all of December, but it might already be too late for that. Generally a different option strike is not enough to avoid the wash sale rule.
     
    #15     Dec 18, 2020
    sepidpooy likes this.
  6. I am net $6k positive on tesla options this year. What happen if I do trade it in Jan? Do I need to pay tax on more than $6k that I earned?

    My last option trade closed on 12/9 with 10k loss.
     
    #16     Dec 18, 2020
  7. I was long on tesla. Please read my post
     
    #17     Dec 18, 2020
  8. LacesOut

    LacesOut

    Selling puts
    Stock at record high
    Lost $10k

    I don’t understand
     
    #18     Dec 19, 2020
    alexray828 likes this.
  9. Sig

    Sig

    We'd need to know all your trade dates and losses/gains but very possibly you would have to pay tax on more. The wash sale rule effectively treats wash sales like the sale event didn't happen and you still have the original position for losses but not gains. So if you never had a 30 day break this year you would pay tax on all your gains without being able to deduct any losses. Note that those losses aren't home forever for tax purposes. If you stopped owning the security for 30 days at any point in the future then you could claim the losses in that tax year. So you're really just deferring your ability to take the loss. Might actually be a good strategy if you think tax rates will go up in a future year I suppose.
     
    #19     Dec 19, 2020
    sepidpooy likes this.
  10. newwurldmn

    newwurldmn

    And you feel confident you will earn in future years.
     
    #20     Dec 19, 2020