Hi,
If you trade in more than one account, you may not be catching all your wash sales, and that gap can turn into a five-figure tax bill you never saw coming.
Quick refresher: the wash sale rule disallows a loss if you buy the same or a substantially identical security within 30 days before or after you sell it at a loss. The catch is how it’s tracked. Your brokerage only calculates wash sales inside that one account. Its 1099-B does not see your other brokerage accounts, your spouse’s accounts, or your IRA. So a 1099-B that looks clean can still be wrong, and you’re the one who signs the return.
Here’s where it actually bites:
- Same ticker, two accounts. Sell at a loss in one account, rebuy the same stock in another account in the 30-day window, and neither 1099-B will flag it. You claim a loss you legally can’t, which understates your income.
- The IRA trap. If you sell at a loss in your taxable account and rebuy the same security in your IRA or Roth, the loss isn’t just deferred, it’s gone permanently, with no basis add-back anywhere.
- Your spouse counts. A wash sale can trigger across a jointly filed couple’s separate accounts, and few self-managed brokerages are looking at both.
- Crypto is a moving target. Spot crypto isn’t subject to the rule yet, but crypto ETFs are, and the new 1099-DA now reports it. Mixing the two is an easy place to get the math wrong.
The IRS matches what you file against every 1099. If you claim losses the wash sale rule disallows, you may get a notice, back tax, and penalties. If you miss the basis adjustments, you overpay. Either way, the fix is the same: someone has to reconcile every account together, not one form at a time.
How We Handle It
- Full reconciliation. We pull every 1099-B and 1099-DA across all your accounts, brokers, entities, and your spouse’s, and calculate wash sales the way the IRS actually requires: across all of them.
- Correct basis and reporting. We apply the right disallowed-loss and basis adjustments and report them cleanly on Form 8949 and Schedule D.
- Trap avoidance. We flag the IRA and cross-account moves before they cost you a permanent loss.
- Personal income tax return completed by the same team
If you trade across multiple accounts or harvest losses at year-end, reply to this email by Friday and we’ll set up a free 15-minute call with our tax team to check whether your wash sales are being reported correctly.
Sincerely,
—
George Dimov, CPA
Licensed and Insured
(833) 829-1120 toll free
(212) 994-8081 Fax
www.dimovtax.com