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Lev
Lev, Tax Advisor
Category: Tax
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For my 2012 taxes, my question involves only the treatment

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For my 2012 taxes, my question involves only the treatment of a speculative stock options account:
3/8/12 - Opening balance $100,000
8/5/12 - Highest balance the account reached: $199,864
12/31/12 - Ending balance at year-end: $27,365
268 option transactions during 2012

On my tax form 8949, my accountant lists column D (proceeds) as +19,059 and column E (cost or other basis) as +18,466, an d column H (gain or loss) of +593.
How can I have a taxable gain if I have a net loss on the account of nearly $73,000 for the year? In other words, is it likely my accountant did something wrong here? Thanks.

Lev :

Hi and welcome to Just Answer!
I will provide the definite answer if you give a list of all transactions during 2012.
Otherwise - I may only guess that was sales are wash sales - and the loss was disallowed.


You cannot deduct losses from sales or trades of stock or securities in a wash sale unless the loss was incurred in the ordinary course of your business as a dealer in stock or securities.


A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you:
--Buy substantially identical stock or securities,
--Acquire substantially identical stock or securities in a fully taxable trade,
--Acquire a contract or option to buy substantially identical stock or securities, or
--Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.
If you sell stock and your spouse or a corporation you control buys substantially identical stock, you also have a wash sale. If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding period of the stock or securities sold.

Lev :

The wash sale rules apply to losses from sales or trades of contracts and options to acquire or sell stock or securities. They do not apply to losses from sales or trades of commodity futures contracts and foreign currencies.

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