wash sale info

Financial Planning Tax Strategies
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I have an unpleasant surprise on my 1099-B from robinhood.

I have been selling short term in-the-money covered call options for income. If stock X was priced at $10 in January, and the April $9 call option is selling at $2.00, I would buy 100 shares of X and sell the April $9 call for $2. When price stayed above $9, the shares got called away from me at $9 for a decent profit. And then I would repeat the process, usually the very next day, and usually with the same company.

My 1099-B has a column 1G - Wash sale Loss Disallowed. So my buy/write transactions were still profitable, just not as much of a profit as I’m getting taxed on. Guess I should have selected different companies after a position closed out.

So if I did such a buy/write trade with a USA automaker such as Ford, and right after the position closed out I did another one with a different USA automaker, such as GM, would my transaction with the shares of Ford be treated as a wash sale?

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So if I did such a buy/write trade with a USA automaker such as Ford, and right after the position closed out I did another one with a different USA automaker, such as GM, would my transaction with the shares of Ford be treated as a wash sale?

No. Different underlying stock, not identical securities for wash sale purposes. And that’s about the most clear-cut question I’d try to answer in this forum when it comes to wash sales with options, without knowing the exact details of every facet of the transaction(s).

Bill

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