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Wiki Selling TSLA Options - Be the House
- Thread starter adiggs
- Start date
komrade
Member
How sustainable is this run up ($200+)? It looks like it has came out of the downtrend for now..
I logged into Fidelity today and checked my YTD Tax activity for last year (2022). The last time I checked I had a 6 figure loss. Today it shows almost a 7 figure gain for the year (despite having had to sell 2/3s of my shares to close DITM BPSs to avoid margin calls). There is a small asterisk saying that Total Realized Gain/Loss is pending an update. I'm freaking out. If they say I actually have gains because of wash sales on my option trading that resulted in massive losses, I'm in trouble. I have the cash in the account right now I could use, but I will risk margin call again if the SP drops back close to 100. What happens if I can't pay my taxes? How bad is the penalty? This is unbelievable.
I think the penalty is 0.5%/month that you haven't paid. On top of that there are interest charges. which I think are 6%. (So essentially they are charging 12%, though the interest rate will probably go up again soon.)
And the penalty probably starts from when the estimated quarterly payment was due.
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Fingers crossed it's a big mistake. A few years back my CPA told me to do quarterly returns. It's a pain in the butt but it forces me to offset profits with losses and keep a closer eye on wash sales. Quarters are important.
Options can become a pain when you need to do quarterlies.
Sounds like you'll have to wait and see what happens with that update. Last year I got wiped out with zero cash remaining, and yet I showed a mid five figure realized gain. Luckily it's long term cap gains but 15% goes to the feds and I didn't account for the 9% california wants. You'll have to paper file your fed taxes and likely submit financials to justify a payment plan. You might be able to e-file your state taxes but likewise you'll likely have to submit financials. Luckily I can pay down state and federal to be below the financial req cap, and I'll request payments to give me time. Gameolan is to pay the tax debt off in two years after I reinvested in Tesla.
Any tax owed in excess of 50,000 you can still do a 7 year payment plan, but they want detailed financials to justify the need for a payment plan.
Worst case you can even do an offer in compromise if you can't pay. Obviously you'll need to show a lack of ability to pay if you go this route.
yeah check your tax documents to see what the 1099 says. 1099s are typically issued by Feb 15.
It's 164 pages long. If I'm reading it right, it says I have over $40m in losses, so I should be good on taxes....
I'm going to upload to Turbo Tax and see what it spits out and report back. Thanks everyone.
Wow.It's 164 pages long. If I'm reading it right, it says I have over $40m in losses, so I should be good on taxes....
I'm going to upload to Turbo Tax and see what it spits out and report back. Thanks everyone.
So sorry.
Yeah, that is the official tax number being reported.
Sounds like you have no worries in the tax payment department.
It's 164 pages long. If I'm reading it right, it says I have over $40m in losses, so I should be good on taxes....
I'm going to upload to Turbo Tax and see what it spits out and report back. Thanks everyone.
Look on the bright side, you'll get $3000 taken off your W2 income for tax purposes!
And a lifetime of tax free capital gains.
But I can forget about every qualifying for a loan every again - "Please send us your 2022 tax return to verify income...."
Is that after netting out the wash sale disallowances? (I think you have to combine those two columns to get your reportable losses.)If I'm reading it right, it says I have over $40m in losses, so I should be good on taxes....
Hire a good tax attorney if you’re unsure about what to file on your return.
For the “underpayment penalty” you’ll be covered under a safe harbor if you’ve paid 110% of your 2021 tax liability. Hopefully you didn’t owe a lot in tax for 2021.
You might still be hit with a “late payment penalty” if you didn’t make estimated quarterly tax payments however.
It's 164 pages long. If I'm reading it right, it says I have over $40m in losses, so I should be good on taxes....
I'm going to upload to Turbo Tax and see what it spits out and report back. Thanks everyone.
Not sure if you’re kidding about TurboTax, a consult with a tax specialist/accountant specializing in the stock trading field is worth the fee. Often the savings can be astounding while still on the up and up.
Well, it looks like I will owe about $173k in taxes.
Roughly $-57m in losses, but wash sale eliminates Roughly $48m of the loss. Then I had $9.5m in long term gains from the stock I had to sell to buy the BPSs and avoid margin calls. So I end up with almost $1m in gains, even though I had to sell 60,000 shares to do it, and will be down $24m when the stock gets back to 400 compared to Jan 2022 (because I will have 60,000 fewer shares than I had before this all started).
Roughly $-57m in losses, but wash sale eliminates Roughly $48m of the loss. Then I had $9.5m in long term gains from the stock I had to sell to buy the BPSs and avoid margin calls. So I end up with almost $1m in gains, even though I had to sell 60,000 shares to do it, and will be down $24m when the stock gets back to 400 compared to Jan 2022 (because I will have 60,000 fewer shares than I had before this all started).
Anyone you recommend? (Yes, we do our own taxes with Turbo Tax).
P.S. - Sorry about hijacking the thread AH a little bit friends. I appreciate the help.
Man sorry to hear that. So a couple of questions and pointers for you:
1. When you say wash sale “eliminates” it usually gets added to the cost basis of the position that is holding the wash sale disallowed unless
2. You traded the same position in your IRA in which case the wash sale is permanently disallowed.
If you have both your taxable and non taxable accounts with the same brokerage I would suggest keeping them with different brokerages to avoid point #2 above.
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