Some confusion about wash sales

Discussion in 'Professional Trading' started by Option Trader, Dec 28, 2009.

  1. There are just a few days till the end of the tax year, and I have some wash sale issues that I am trying to handle.

    1. In August, if I bought and sold shares with a net loss, and with a was sale problem, will that increase my cost basis only on future trades, or also on an outstanding trades that I am holding from earlier months (e.g. if I bought & hold shares from April)?

    2. Is a vertical options spread viewed as separate trades, or all as one trade?

    2b. (Assuming the former is possible) If I placed a vertical options spread, and closed out one leg of the sale before the end of the tax year (at a loss), and the other leg the next tax year (at a gain) but within 30 days, does that create a problem of a wash sale (and the loss is not viewed as realized for the year 2008)? Will the latter have a higher cost basis?

    2c. Same as 2b, except if I close out the leg which realizes a gain before the end of the tax year (noting there is no wash sale problem with taking gains), and then only the next tax year close out the other leg, will the gain be realized for the year 2009?

    Thank you in advance.
  2. Anyone?