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
|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