Considerations
The IRS created the wash sale rule under 1091 to prevent investors from recognizing "artificial" losses by selling a stock for a loss, and then repurchasing the stock within a short period of time.
The wash sale "window" starts 30 days prior to the sale, includes the date of sale, and ends 30 days after the sale - for a total of 61 days. If an investor sells a stock at a loss, and then buys a "substantially identical" replacement stock within this 61-day window, the loss is deferred until the replacement shares are sold. The pro rata loss is added to the cost basis of the replacement shares purchased, and the holding period of the replacement shares includes the holding period of the original shares sold. The deferred loss will eventually be recognized when the replacement shares are sold.
Note the following:
GainsKeeper will continuously monitor your accounts for wash sales and will automatically update your cost basis and capital gain/loss report for any wash sales within your long trading activity, short trading activity and option trading activity.
GainsKeeper does adjust for wash sales across short-to-long holdings. Wash sales can be avoided by using GainsAdvisor and waiting to repurchase replacement shares until after the 30-day window closes.
GainsKeeper will detect and adjust cost for wash sales across options of the same symbol. If you sell a call option for a loss, and then purchase the same call option within the 61-day wash sale window, GainsKeeper will defer the loss and add it to the basis of the option. The same scenario applies for the sale and purchase of put options.
GainsKeeper does not adjust for wash sales if you sell the equity at a loss and then open a call option for the same equity within the wash sale window. GainsKeeper also does not currently adjust for straddle tax implications. If you use straddle strategies, you should consult your tax advisor to determine if and how you could be affected by these rules.
Procedure
To view wash sale adjustments, do one of the following:
From GainsTracker>View Accounts, select the Realized Sell Activity view from the drop-down list at the top of the page.
From Tax Center>Custom Reports, select Realized - custom date range from the Type drop-down list.
From GainsTracker, select Symbol Details. Select the appropriate symbol in order to view historical information for that specific symbol(s).