Wash sale question

Discussion in 'Taxes and Accounting' started by S2007S, Jun 10, 2021 at 10:03 AM.

  1. S2007S


    If one is long a bear index fund like SDS (s&p short etf) and you short an etf like SPY does a wash sale come into play ?
  2. I think not.

    The wash sale would come into play when you want to claim a loss but have bought an issue within 30 days which is "substantially the same" as the one you are looking to claim loss upon.

    What would be an example of "substantially the same"? How about if you sold a fund described as "Vanguard SP 500 Index" and bought "Fidelity SP 500 Index".
  3. S2007S


    They aren't identical etfs however they both fall under the s&p 500 categories!!

    One is a short bear etf. The other being a bull etf however the bull etf is the one I'm shorting while holding long onto the short bear etf s&p 500

    I have read some articles where it can be a bit confusing, like you mentioned selling vanguard 500 while buying fidelity 500 index. To me I never understand that situation. You are totally trading 2 entirely different tickers.
  4. Girija


    Law or statutes don't define this exactly. You will be OK as long as you aren't under any audit. If under an audit it depends on amount involved and if the other side represents someone who really wants to take an opposing view or not. These things aren't defined clearly so a moron can argue to his advantage. There is also a subtle underline in wash sale rule that it spans brokerage accounts and tax deferred accounts too but irs does not get basis from tax deferred accounts. What is the probability that the software would include pairs of tickers to catch them?
    Trader200K likes this.
  5. Q.E.D.


    More than 10 years ago I declared "trader status," for stocks & stock options, but not for futures. With trader status one can ignore wash sale rules. Makes record keeping easier, although brokers don't seem to have an option to select that status when they report year-end tax calculations.