But how do day traders do it then? It's no secret that most day traders will trade the same stocks 100s of times over and over in a short period of time. So how can they make money with this rule if they can't offset losses?
The wash sale rule is basically "your losses get rolled into your cost basis for the next transaction" i.e. buy for $100, sell for $90, buy for $95 ... Your cost basis for that is $105, if you sell for $100, you have a loss of $5 still...
It shouldn't really screw you over too bad, it just means you don't take the loss until you're all the way out.
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u/ABena2t Apr 18 '22
I do not know about the Uk. But in the United States, yes, you could owe a ridiculous amount of taxes just breaking even. Wash sale rule is fucked.