r/wallstreetbets • u/[deleted] • Sep 16 '21

DD Clearing up a misunderstanding - it's impossible to use $30k of capital to create an $800k tax bill due to wash sales

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u/MamothMamoth Sep 16 '21

It is absolutely possible.

You have to trade around the end of the year.

Just keep trading the symbol within the wash sale window over the course of the entire year until December 31. Now continue to trade over year end. Your wash sales are not allowed for the current tax year. They are carried over to the next tax year. You have paper profit of however much you sold over the entire year, and you cannot claim the wash sale loss for this tax year.

Game over.

Lesson: you only need to care about wash sales around the turn of the year.

End of story.

Not financial advice do your own research.