Hi all, I have a question regarding wash sale loss carry over, here is my situation: During market crash in Dec. 2018, I closed my Dec 2018 spy 280 put, and opened June 2019 SPY 270 PUT, it caused wash sale loss: $3000. Now the June SPY 270 put closed (expired), could I get the wash sale loss carried over? Thanks!
I was not under the impression that options where substantially identical to each other (different maturities, strikes), so I wouldn’t have thought the trade cited in OP would have caused a wash sale in the first place. Are you sure your broker reported that? The only case I know of when an option should generate a wash sale is if you’re actively trading a single contract. For example, buy the Dec put for $2, sell it for $1 at a loss, buy it back at $1.50, sell for $1.50. In this case, the first loss $1 would be a wash sale due to the subsequent repurchase (within 30 days), so it would be added to the basis of the second buy, ie your tax basis for that buy would be $2.50, not $1.50 actually paid due to the wash sale loss of $1 being added. Hopefully your broker would have taken care of that in their reporting, although you might not have noticed if you didn’t check the basis of the second trade vs the price you actually paid. If that wasn’t your situation and your broker reported a wash sale, you may want to double check the exact trades you made and post them here or ask the broker for clarification.
Excerpt from GreenTraderTax Blog... (highlight mine) WS rules for taxpayers and brokers are different Taxpayers must calculate WS losses based on “substantially identical securities” (i.e., Apple equity vs. Apple options), across all taxpayer’s brokerage accounts, including IRAs and spousal accounts if married/filing joint. Conversely, brokers calculate WS based on “identical securities” (an exact symbol) per the one brokerage account. This apples vs. oranges is problematic since the IRS seeks to match broker 1099-Bs to Form 8949 prepared by taxpayers.
Sure but if OP made all their trades as the same broker, as is likely, that broker should have handled the wash sales, if any, correctly. If you make trades across different broker in the same security, they won’t know about each other and the reporting can be more complicating.