Wash sale applicable on forced buy-in ?

Home Fairmark Forum Taxation of Investments Wash sale applicable on forced buy-in ?

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  • #77533
    amhanra
    Participant

    I was forced by broker (reg SHO 204 buy-in) to square off (buy-in) on short sale transactions (several on one single day) on a stock.  The buy-in was done by me (broker threatened to square off in 8 hours time) in 4 separate transactions.

    Now the broker is reporting wash sale on 1099.  To me, since this was forced on me, wash sale cannot apply.  Any feedback greatly appreciated.

    #77534
    Kaye Thomas
    Moderator

    Sorry, but the wash sale rule is not limited to voluntary transactions. Even if the buy-in had been done by the broker, that would not prevent the wash sale rule from applying.

    #77535
    amhanra
    Participant

    Many thanks

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