wash rule

A client just asked me to look at jan and feb 2020 brokerage statement to see if broker repurchased any shares that sold
at end of 2019 for wash sales.

Does anyone here ever do that?

Nope. Isn't that information is supposed to be included in the report provided by the broker?

The thing I wonder about is how we are supposed to deal with clients with multiple accounts. One broker cannot know what another is doing. I don't receive the information to identify when a security was sold in one account and purchased in another. To do this properly, there would need to be software that could manage thousands of transactions a year, identify the wash sale, identify which broker triggered the wash sale, notify the sale broker to adjust out the loss in the annual reporting and the purchase broker to adjust the basis of the purchased stock....

ty for response; agree...it's really unenforceable unless just assessing one brokerage account....this client's daughter is pretty smart...i guess she is ultra by the book...and would think of such a thing....i'll ask the broker anyway.

But i've never looked at jan brokerage statements to check for wash rules.

JAD, look at Gainskeeper. It worked for a day-trader who was a client at a former firm.

EDIT: Oh, and I should mention the client readily paid for a subscription when presented with a quote for us to do the work!

Does anyone here ever do that?

No... It's a waste of time.

Generally wash sales, even ones stemming from a sale on December 31st and a repurchase in January on the last day of the wash sale window will be reflected on the 1099-B assuming we're talking about activity in only one account...

There's a reason most brokerage houses don't issue consolidated 1099 statements before February 15th... By that time they have all of the data points they need for the computers to start churning out the 1099-Bs.

If they missed something by chance, a corrected consolidated 1099 will be issued.

it's really unenforceable unless just assessing one brokerage account....

Huh?

That's interesting ManVsTax....

What i was saying if you sell a stock on Dec 31 for ex in one brokerage account for a loss
and
then repurchase the same stock in another brokerage account Jan 5 of the next year -

the 1099's will not catch or reflect that wash.....it's basically unenforceable in that regard

Ah, I see.

It's still a wash sale though and should be treated as such. If a client has multiple accounts and/or multiple financial advisors/managers, they either need to all coordinate or software needs to be employed to track everything as already mentioned.

The thing I wonder about is how we are supposed to deal with clients with multiple accounts.

Alert them to the issue, tell them they need a consolidated trade blotter of some kind to pick up wash sales, offer to do it for a fee (or hire it out to a third party, software solution, etc). Point out that their investment approach has a tax compliance cost that they have to pay for. It's also a service that an investment manager can provide, coordinating tax-loss sales so they steer clear of the wash rules. For most investors this isn't really a big issue because most people don't really bother with tax-loss sales. Those that do have to make sure it's coordinated, either by a manager or by tracking it themselves.

A related question. I suppose the brokerage company takes care the deferred loss from wash sale and add it to the cost basis of the stocks when it is sold in the future. Can we count on that?

I always have. But I'll bet there have been instances of mistakes.