# What do I need to do to exit the wash sale so the loss would have been allowed?

This past year I started heavy day-trading of option contracts. I was aware of the wash sale rule... however when I received my 1099-B the wash-sale calculations are significantly different than I expected.

One example of this is with BGFV.

On my 1099-B the totals for BGFV are as follows...

• Proceeds: (-459.28)
• Gain/Loss: (-347.96)
• Wash Sale Loss Disallowed: 111.32

The below trades are the ONLY transactions against BGFV for the entire year.

Note: observe that I opened a Short position on Calls

# Timestamp Description Amount Commission Reg Fee
1 11/10/2021 10:09:49 Sold 1 BGFV Nov 19 2021 60.0 Call @ 2.4 239.34 0.65 0.01
2 11/10/2021 10:52:29 Bought 1 BGFV Nov 19 2021 60.0 Call @ 3.5 -350.66 0.65 0.01
3 11/11/2021 15:24:19 Sold 1 BGFV Nov 19 2021 60.0 Call @ 2.02 201.34 0.65 0.01
4 11/11/2021 15:29:57 Sold 1 BGFV Nov 19 2021 60.0 Call @ 3.24 323.34 0.65 0.01
5 11/11/2021 15:42:37 Bought 2 BGFV Nov 19 2021 60.0 Call @ 3.8 -761.32 1.30 0.02

Given the above information...

• Trades #1 & #2 (239.34 - 350.66 = -111.32) which is the same as my 1099-B shows as disallowed
• wash sale was triggered by trade #3
• no wash sale triggered by trade #4 (wash sale only affected 1 contract)

Question: On trade #5 when I sold my remaining 2 contracts why did I not exit the wash sale? The trades were placed in mid-November so there was more than 30 days after I exited the trade until the end of the year.

I am confused as to why my 1099-B shows a Wash Sale Loss Disallowed of: 111.32. Can someone explain what I needed to do to properly exit the wash sale so the loss would have been allowed?

I understand that buying the same security within 30 days before/after will trigger a wash sale. My understanding is the Cost/Basis is added to the next trade... so closing out the entire position should have resulted in the wash sale loss being allowed

I do my own taxes and this is the 1st year I have ran into this... any help would be appreciated

• Note that the loss is not disallowed - it's just deferred until you close out your position, which in this case was on 11/11 (assuming you made no other trades on similar options). Hopefully you discovered that and still claimed the loss on your 2021 taxes. Nov 2, 2022 at 18:18