washsale |Form 8949 Capital Gain & Wash Sales calculator software

End of Tax Year


After all trades executed during the tax year have been imported and matched correctly, you are ready to end of tax year for the next tax year.
With this function, you can check next tax year’s baseline position include year end open position and deferloss to each washsale position.

Let’s take the Tax year 2005 as an example. Please follow steps below to End the Tax Year:

  1. Right-click the folder FY2005 under the specific account in the Account List and the following dialog box will pop up:You will see 2005 Year End Open Position & Defer Loss.
  2. Confirm your open position with your December statements from your brokerage.If there is any unmatched position, you can check these:
  3. Click on Next button and the New Year Baseline Position dialog box will show:
    The baseline position contains Open Position (long, short)Learn more about: Long, Sell to Open
  4. Click Finish to complete the progress. Then next tax year’s baseline position and defercost will display in next tax year’s (In this example, it is tax year 2006) Baseline window and data grid as the following:After end of the tax year, you will see,
    • the next tax year Baseline view icon will become icon .
    • the Finance year view icon will become icon

    Tips: Finance year view Icon means you have already done End of Tax Year.

Wash Sales Calculation Rule


IRS pulication 550 define Wash Sale as follow:

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 begins on the same day as the holding period of the stock or securities sold.

Example 1.

You buy 100 shares of ABC stock for $1,000. You sell these shares for $750 and within 30 days from the sale you buy 100 shares of the same stock for $800. Because you bought substantially identical stock, you cannot deduct your loss of $250 on the sale. However, you add the disallowed loss of $250 to the cost of the new stock, $800, to obtain your basis in the new stock, which is $1,050.

The defination of Substantially Identical Security ( hereinafter refrrer to as SIS) rule by IRS is so complicated and vague that some special cases can not get a certain and autorative explanation. But which does not mean we can ignore the IRS SIS rule especially relating to option trading when a wash sale is deemed obvious.
A wash sale occurs when you sell a security at a loss but then repurchase it within 30 days at the low price. For tax purposes, capital losses are disallowed or postponed under these circumstances. Special tax rules apply.

TradeMax provides you with calculation rule for your transactions.

  1. Click main button , and a main menu opens:
  2. Click Options button, and then select Washsale tab,  the following dialog box displays:

Function
Description
1.Washsale After clicking Options button, you should select Washsale tab.
2.SIS Calculation Rule Slider You can move the slider to select a SIS rule for washsales calculation.
3.SIS Rule for washsales Calculation Description Field According to different washsale calculation method and calculation difficulty level, the following calculation rule with eight different levels summarizes when a wash sale will be triggered under different methods.

  • None: -Do Not Apply Wash Sales Rule
  • Low—stock with the same expiration and strike price
  • Medium Low—stock with same underlying
  • Medium–stock with same underlying
  • -Buy any call option (or SSF) of the same equity/stock when buy stock at a loss

  • Medium High -stock with same underlying
  • -Buy any call option (or SSF) of the same equity/stock when buy stock at a loss

    -Short deep In-The-Money put option of the same equity/stock when sell stock at a loss

    *  Any expiration that is deep in the money

  • Default– stock with same underlying
  • -Buy any call option (or SSF) of the same equity/stock when buy stock or call option at a loss

    -Call option(ssf) can defer loss to call option(ssf) with same underlying

    -Short any put option of the same equity/stock when buy stock at a loss

    -Put option(ssf) can defer loss to put option(ssf) with same underlying

  • High—  washsale between same underlying Securities with same action.
  • Option can only defer loss to any option

  • Accept All-washsale between same underlying Securities with same action.
  • option can defer loss to stock

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