Someone asks:
How do you make a wash sale go away? It was a mistake I made over a year ago and bought many shares since then.
Answers:
Kyle G:
They don’t “go away” it’s a permanent marker that those losses will be disallowed. There is no time limit on that and mistakes don’t matter in this law.
Andrew B:
You can’t make a wash sale go away. Once the second trade is finalized, the deal is done. If you were hoping to deduct it, there is no way I know to do so.
Todd A:
So when did you buy the replacement shares? 2020 some time? All it did was roll the loss into the new position.
If/when you sell, your gains will appear to be lower by the same amount as the loss of the previous position because the cost basis on your new position is adjusted. It’s no big deal, if you’re holding the shares, it can stay with you forever.
There’s nothing to be concerned about unless it’s a substantial loss and you need that to offset some substantial gains.
To answer your question, if you sell the “wash sale replacement shares” that you’re holding, then there’s nothing in your account that’s a wash sale anymore. Everything should be made whole at that point.
Johnny M:
You can’t make it go away. It’s recorded in your Activity Database as such. You can’t tell fidelity to delete it if that is what you did. Inaccurate books and records rule.
Robert A:
It doesn’t go away, but it’s not a big deal, you just got place back to your old cost basis, so it technically it reverted back to an unrealized loss. If the price stays there or goes further down and you sell, you can realize the loss then, or if it goes up, great – you’re in the money.
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