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The common misconception is that a wash-sale permanently disallows adding the loss to your taxes. That is simply incorrect; it temporarily disallows it - because you bought the same security, it is 'parked' in the newly bought pieces, and once you sell those, it comes back out (unless you buy them again within 30 days, then it get's 'parked' again, etc.). ...


On Jan 2nd you realize a loss of $1. When you buy the share back on Jan 3rd, you create a wash sale and the $1 loss deduction is disallowed (temporarily) and must be carried forward. The disallowed loss is added to the cost of the replacement share and when you sell on Jan 4th, you realize the $2 loss, for tax purposes. All of this just means that it's an ...


As long as these are all the transactions of XYZ and you don't reopen the position within 30 days you have a tax loss of $2 that you can deduct.


Assuming that this is the U.S. then if your name is not on the brokerage account then you can neither be taxed nor can you deduct the loss. Your father's social security number is what the broker uses for reporting the transactions to the IRS. Per your comment, he will be able to carry over that loss to the next year. provides an explanation ...


Yes, this is a net short term capital loss deduction of $900. FWIW, if you're going to chase short option premium, sell credit spreads so you can avoid large losses like this.

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