I've been trying to resolve this on my own but I'm stuck.
day trader wash sale confusion. I've been dealing with this for about 12 weeks now and the situation isn't improving no cap.
I have already consulted briefly with a lawyer but did not get a clear answer.
What's the typical outcome in situations like this?
I work in this industry and unfortunately this is very common. The good news is that when people actually push back with legal representation from what I've heard, companies usually settle....
Just want to point out — the statute of limitations might be a factor here. In some states it's as short as 1-2 years. Don't sit on this too long.
This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.
Been there. Here's what I learned.
I ended up having everything documented, which cost about $3-6 but saved me a lot more in the long run.
Tax season update for active traders filing 2025 returns: the IRS released updated guidance in Notice 2025-12 clarifying how wash sale adjustments should be reported on Form 8949. If your broker reported wash sale disallowed losses in Box 1g of your 1099-B, those amounts must be added to the cost basis of the replacement shares in Column (g) of Form 8949. This is the adjustment that most traders and even some CPAs get wrong.
For those using tax software specifically designed for traders -- TradeLog, GainsKeeper, or the wash sale module in TurboTax Premier -- make sure you are importing your 1099-B data directly rather than entering summary totals. The software needs the individual transaction data to correctly match wash sale pairs across different lots and accounts. If you trade the same securities in multiple brokerage accounts, your brokers will not cross-reference wash sales between accounts. You are responsible for making those adjustments manually or through dedicated software.
Also, for anyone who made or is considering the Section 475(f) mark-to-market election that was discussed earlier in this thread: the IRS has been scrutinizing these elections more closely. To qualify as a trader (rather than an investor), the IRS looks at frequency of trades, average holding period, time spent on trading activities, and whether trading is your primary income source. The Tax Court in Endicott v. Commissioner denied 475(f) treatment to a taxpayer who made over 1,000 trades per year but held positions for an average of 31 days. The court found the holding period was too long for trader status. If your average hold is under 5 days, you are generally safe.
One final tip: if you owe more than $1,000 in taxes and did not make estimated payments throughout 2025, you will owe an underpayment penalty under IRC Section 6654. The penalty rate for Q1 2026 is 7 percent. File by April 15 even if you cannot pay the full amount -- the failure-to-file penalty (5 percent per month) is ten times higher than the failure-to-pay penalty (0.5 percent per month).