Will this case trigger the whitewash rule for cap gain loss?

24 views
Skip to first unread message

alex

unread,
Nov 19, 2021, 11:13:00 AM11/19/21
to
This is a question ONLY about applicability of the whitewash rule, not about option trading strategies.
I sold ROKU option puts at $260, they are assigned today, the now price is $238.
That means on Monday I bought 1000 shares of Roku at $260, while the market price is $238. If I sell them immediately I will book for tax purpose a short cap loss of $22,000. If I want to buy ROKU back at less than $260 I will need to wait 30+ day, or the whitewash rule triggers.

An alternative scenario I am thinking is to still sell now ROKU for the loss of $22,000 and also sell an option put with strike close to $238 and expiration longer than 30 days. That means, I collect now the premium from selling the put, and after 30+ days, ROKU is still at or below $238 I will buy back (assigned) the 1000 ROKU shares. Will this strategy trigger a whitewash rule?

Appreciate the help, Alex

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Reply all
Reply to author
Forward
0 new messages