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I am not an accountant. But my understanding of the wash sale rule is that
there's no difference whether you're a day trader - or a longer term trader. If
you have a wash sale - it's a wash sale.
And my understanding of the way wash sales work is that if your loss is
disallowed because of the rule - you simply adjust the basis of your next
position (as well as the purchase date for purposes of computing your long
term/short term holding period). For example (hope I get this right) - if you
show a loss of $2000 on a sale and the loss is disallowed by the wash sale rule
- and you buy back the position the next day - your basis is the purchase price
plus $2000 (the amount of the disallowed loss). So if you were to sell the
position at a breakeven point 3 days down the road - and not replace it - your
loss would be $2000. Like I said - I'm not an accountant - or a day trader - so
check all of this out. But I think the bottom line is that there's no reason
why the wash sale rule doesn't apply to day traders - and you may well have a
heck of a lot of bookkeeping to contend with). Robyn
Robert W Cummings wrote:
> I got a tax question that has not been answered on this list as yet. When
> day trading stocks for small moves in the same security does the wash rule
> prevent you from off setting gains with losses?
>
> Robert
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