All — Like most of you, I trade a lot with C2 systems and most of these systems are trading 1-2 specific securities which means that I’m showing a ton of wash sales on my 8949. Curious how most of you are managing these at tax time? Are most folks declaring Tax Trader Status (TTS) to eliminate the wash rule? In one case it was actually the C2 platform that messed up a short position with TSLA back when it had the 5 to 1 split resulting in covering the position and immediately shorting it again 30 minutes later. Unfortunately the system had no other TSLA gains so I’m stuck with a massive wash on that transaction. Anyway… just curious how most folks handles the washes especially in situations where there isn’t a vehicle to carry the wash forward on a future buy.
FYI, declaring Trader Tax Status does not eliminate the wash sale rule. You would have to file for a Sec 475 election (mark to market) for that. And the election would have to be filed by April 15, 2021 for the 2021 tax year. So it would be too late for the 2020 tax year.
I was looking for this couple years ago just to found out that following signals can not be qualified as TTS. Anyway, it is better to check with good CPA specializing on trading.
Robert Green, CPA specializes in trader tax issues. Here’s a link to his website.