Welcome Stockaholics!

We are a new and fast growing financial forum! Sign up for free and let's talk stocks!

  1. Do you want to help develop this community? We are looking for contributions from investors and traders like you! What stocks do you follow? What is hot right now? Sign up and get in on the ground floor of the newest, fastest growing financial forum!
    Dismiss Notice
  2. You will notice a live chat widget on the right. Click in to join us and lets hear about how you nailed that last UWTI trade!
    Dismiss Notice

Wash sale disallowed

Discussion in 'Personal Finance' started by steve ma, Nov 21, 2019.

  1. steve ma

    steve ma New Member

    Joined:
    Apr 18, 2019
    Messages:
    6
    Likes Received:
    0
    I helped a friend to invest in stocks and told him that I would pay him to cover the net loss. Now, according the tax form (it was Form 1099), the loss was 2000 (it shows -2000 on the form) and the
    Wash sale disallowed is 100 (it shows 100 on the form). Should I pay him $2000 or $2100?

    Thanks.
     
  2. Three Eyes

    Three Eyes 2018 Stockaholics Contest Winner

    Joined:
    Dec 14, 2017
    Messages:
    841
    Likes Received:
    776
    If he lost $2,000, then his loss was $2,000, no matter what the 1099 says. So if he started with 10k and he now has 8k and you said you would make it good, his real loss is 2k and that's what you owe him.

    However, for tax reporting purposes, his loss may be less than $2,000 depending on how much is disallowed from trading in the same or substantially similar security in the same or any other account (including retirement accounts) within 30 days before or after owning the security (securities) where the loss occurred. It sounds like the 1099 is telling him he may only be allowed to claim $1,900 loss on his 2019 taxes.
     
    Onepoint272 likes this.

Share This Page