December trading, Wash Sales Rule

Discussion in 'Professional Trading' started by dholliday, Feb 16, 2013.

  1. dholliday


    Is it true that closing all your positions and not trading during the month of December solves Wash Sales Rule tax problems?
  2. As long as your last trade on any stock that might have a wash sale applied to it is greater than 30 days prior to December 31 you should be all set. I did this in my IB account – I had wash sale issues last year with my QQQ trades . This year I made sure I had no wash sales going into December and for any loss I took on a stock in December I would not trade it in January until the wash sale period had expired. So the simple answer to your question is should not have any wash sales if closed out your positions on 11/30 and did not trade them in December.
  3. gkishot


    True. Closing all your losing positions only should be enough.
  4. dholliday


    Thanks, I will try to remember to post this information next year in November (and Keep it alive by replying). This is an incredibly simple solution and could save many from nasty surprises.
  5. Close any long positions before December, you may continue to hold shorts or trade from the short side in December different ones.
  6. I'm not following the responses here.

    This would do nothing for any wash sales he had any other time of the year.

  7. ?????

  8. All that matters here is that he has no wash sales remaining for Tax purposes. Wash sales early in the year are absorbed into future trades . If you have no trades the last 30 days of the calendar year you have no wash sales to carry forward into the next year. Pretty simple to understand.
  9. Hi

    I'm not understanding these other responses here.

    If you sell a stock at a loss, you need to wait 30/31 days, if you want to keep that in your capital losses, to get the tax deduction.

    If you enter before the 30/31 days, that previous sale at a loss is now washed out, and no longer counts as a capital loss.

  10. gkishot


    This is more to do with whether position is at profit or loss, not long or short.
    #10     Feb 16, 2013