Say you buy XYZ and lose money. Then you buy it again and lose money. Then you buy it again and lose money. Can you deduct these loses or is it a "wash sale"? thanks guys
it is not a wash sale as long as your last trade is a sale. if your last trade is a buy and it was less than 31 days since your last loss sale then it is a wash sale.
so if im in and out of a stock 10 times a day and lose money every time I can deduct the total amount of my losses correct? But if I made money on one trade then everything would be a wash sale and I couldn't deduct anything right?
yes as long as the last trade is a sale. example,you buy spy at 100 and sell at 99 and you have a $1 loss. but if you buy spy back and hold within 30 days it is a wash sale. you then cant deduct the loss but it is rolled forward into the next trade. if you buy it again at 99 and sell at 98 you have another $1 loss but your basis is 100 since you rolled the first loss into the second trade. you then have a tax deductable loss of $2 unless you buy it back and hold within 30 days so it again becomes a wash sale and the loss is rolled into the next trade. this can continue until you either make a cumulitave profit or you do not buy it back for 30 days. if you make money on a trade it would reduce your basis by the amount you made.