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Old 02-25-2019, 07:15 PM
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Wash Sale Question when Selling Options

Hi. I understand wash sales to the point that they are disallowed loses when you buy the stock back within 30 days and that you get to recapture the unrealized loss on the new purchase when it is sold. My problem is how do I adjust the cost basis of the new position on Selling Puts. Here is what I'm dealing with as an example:

I'm looking at Form 8949 after I imported all my trades. It has the following information simplified for the security with a wash sale

a- Put ORCL b- date acquired 3/23 (sold put) c- date disposed 3/26 (bought to cover and sold - rolled) d- Proceeds -$400 e- Cost Basis 0 f- W g- $250 h- Gain or loss $-150

On 4/20 I bought to close the Put which shows on the import like:

a- Put ORCL b- date acquired 4/20 (bought to cover) c- date disposed 4/23 (Not sure why this 4/23) d- Proceeds $1000 e- Cost Basis 0 f- empty g- empty h- Gain or loss $1000

Because of the way options are report as just the gain or loss with no cost basis, how do I adjust for the $250 wash loss in the 4/20 transaction? Do I just change the $1000 to $750 in both places and enter some code for (f)? I'm at a loss.

Part 2 of the question. For the same situation where I had a wash sale on 12/21/18 and I bought to cover a roll on 1/7/2019, how do I handle this? Do I just leave the wash sale entries as is and next year adjust the 1/7/2019 cost basis?

Thank You!



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