Navigating Wash Sale Rules for Options Trading - Different Expiry/Strike Clarity

I recently got into trading call options on Robinhood and I'm confused about how wash sale rules apply to options specifically. The rules seem really unclear when it comes to options. Here's my situation: Say I buy some AMZN call options with a $2000 strike price expiring 11/2 yesterday, and then I sell all of them today at a loss. If tomorrow I buy another AMZN call option but with either a different expiration date or a different strike price (or both), does the wash sale rule apply? My understanding is that since the expiration date and/or strike price would be different, my first loss sale wouldn't be considered a wash sale. Is that correct? My impression is that two call options are only subject to wash sale rules if the first option is sold at a loss and the second option I buy has the EXACT same strike price, expiration date, and underlying stock. Would really appreciate if anyone who has experience filing taxes after trading options on Robinhood could share some insights on situations like this. The last thing I want is an unexpected tax bill because I misunderstood these rules!

0 coins

19 comments

Mateo Hernandez

The wash sale rule is tricky with options, but I can help clarify. The key question is whether options with different strike prices or expiration dates are considered "substantially identical securities." According to most tax professionals' interpretation, options with different strike prices OR different expiration dates are generally NOT considered substantially identical securities. This means in your example, if you sell AMZN calls at $2000 expiring 11/2 at a loss, then buy AMZN calls with either a different strike price OR different expiration date, it typically wouldn't trigger a wash sale. However, be aware that the IRS has never provided extremely clear guidance specifically for options. Some tax professionals take a more conservative approach, especially if the new options are very similar (like just one week different in expiration). If you want to be extra safe, consider waiting 31 days before trading similar options on the same underlying stock after realizing a loss.

0 coins

Mateo Hernandez

Switching from calls to puts on the same underlying security is generally not considered a wash sale since puts and calls have fundamentally different economic outcomes - they move in opposite directions in relation to the underlying stock. Robinhood does attempt to track wash sales for your 1099-B, but their reporting may not be perfect, especially with complex option strategies. Many traders find discrepancies or situations where Robinhood's algorithm doesn't correctly identify all wash sales according to their interpretation of the rules. It's wise to review their calculations and possibly consult with a tax professional who understands options trading if you have significant trading activity.

0 coins

Aisha Khan

Just wanted to share that I was in a similar situation last year and found https://taxr.ai incredibly helpful for sorting through my options trades. I was trading multiple contracts with different expirations on the same stocks and wasn't sure what qualified as wash sales. When I uploaded my Robinhood 1099 to them, their system automatically identified which of my trades were potential wash sales based on the actual IRS guidelines - not just Robinhood's sometimes questionable reporting. It saved me from manually reviewing hundreds of trades and potentially making costly mistakes. Their analysis showed me that my trades with different strike prices weren't wash sales, which saved me thousands in deductions that Robinhood had incorrectly flagged!

0 coins

Aisha Khan

The analysis only took about 10 minutes for my 300+ trades. Their algorithm processes everything quickly and shows you exactly which trades triggered wash sales and why. It absolutely works with all major brokers. I actually had accounts with both Robinhood and Webull, and it combined the data from both to identify cross-platform wash sales (which many people miss). Their system not only gives you the bottom line but also explains each flagged trade with references to the specific IRS rules that apply. You can even see visualizations of your trading patterns and wash sale clusters.

0 coins

Yuki Ito

I tried taxr.ai after seeing it mentioned here and holy crap it was a game changer for my option trading tax situation. I was about to pay an accountant $600 to sort through my trades but decided to try this first. I uploaded my Robinhood statements and it immediately identified that several of my TSLA option trades with different strike prices had been incorrectly flagged as wash sales by Robinhood. It showed me exactly which IRS rules applied to my situation and how the different expiration dates and strike prices made them separate securities. Ended up saving about $3200 in deductions that I would have lost! And their explanation made it easy to understand why certain trades weren't actually wash sales despite having the same underlying stock. Definitely using this again for 2025 taxes.

0 coins

Carmen Lopez

If you're having trouble getting clear answers about your wash sale situation, you might want to try calling the IRS directly. I know it sounds awful, but I used https://claimyr.com to skip the hold times and had an IRS agent call me back. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was in a similar situation with SPY options last year and needed clarification. The IRS agent I spoke with confirmed that options with different strike prices or expiration dates are generally not considered substantially identical securities for wash sale purposes. Getting that direct confirmation gave me confidence in how I filed. Much better than stressing about it or relying on possibly outdated forum advice. The service got me connected in about 20 minutes when the normal hold time was over 2 hours.

0 coins

Carmen Lopez

Yes, they called me back the same day! I used it in early February during peak tax season. The system held my place in line and I got a call when an agent was available - didn't have to stay on hold. I got lucky with a knowledgeable agent who had actually worked with options traders before. I went into the call prepared with specific questions and examples which helped. You're right that not all agents are equally knowledgeable, but the one I got explained that different strike prices and expirations are treated as different securities. He pointed me to the relevant section in Publication 550 which backed this up. The key was getting to speak to someone in the first place, which would have been impossible without skipping the hold time.

0 coins

QuantumQuasar

I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway because I had questions about my NVIDIA options trades that might trigger wash sales. The service worked exactly as advertised. Got a call back from the IRS in about 30 minutes, and the agent I spoke with was surprisingly knowledgeable about options trading. She confirmed that calls with different expiration dates are NOT considered substantially identical securities, even with the same underlying and strike price. She also explained something I didn't know - that Robinhood's reporting might be overly conservative and flag non-wash trades. The agent suggested I could file based on the actual rules rather than just accepting Robinhood's calculations, as long as I documented my positions properly. Saved me from overpaying taxes on about $7k in temporarily disallowed losses. Worth every penny.

0 coins

Zoe Papanikolaou

Hey everyone, a bit late to this thread, but I wanted to add something important about wash sales with options that hasn't been mentioned yet. Even if your options have different strike prices or expiration dates, if you're trading weekly options on the same underlying security in a pattern, some tax professionals argue the IRS could potentially view this as an attempt to circumvent wash sale rules. For example, if you consistently trade SPY options every week with a pattern of selling losers and immediately buying the next week's option, there's a risk the IRS could view this as substantially identical in an audit situation, even though technically they have different expiration dates. This is a grey area, but something to be aware of if you're an active trader doing this repeatedly throughout the year.

0 coins

Zoe Papanikolaou

This comes from discussions with a tax attorney who specializes in securities trading. There's no explicit IRS guidance that addresses pattern trading of options with different expirations - that's why it's a grey area. The concern stems from the "substantially identical" language in the wash sale rules. While different expirations technically make options different securities, the IRS could potentially argue that a pattern of rolling weekly options is effectively maintaining the same economic position. It's similar to how they sometimes view certain futures contracts as substantially identical despite technical differences. This is more of a risk consideration than a definitive rule. If you're trading significant amounts or have large losses, it might be worth getting a written opinion from your accountant to document your position in case of an audit. Most retail traders probably won't face scrutiny on this, but those with larger accounts or who claim significant losses might attract more attention.

0 coins

Keisha Jackson

I've been trading options for about two years now and ran into similar confusion with wash sale rules. Based on my experience and research, your understanding is generally correct - options with different strike prices OR different expiration dates are typically not considered "substantially identical securities" for wash sale purposes. However, I'd recommend keeping detailed records of all your trades, including the specific contract details (strike, expiration, underlying). The IRS guidance on options wash sales isn't crystal clear, and brokers like Robinhood sometimes make errors in their reporting - both flagging legitimate trades as wash sales and missing actual ones. One thing that helped me was creating a simple spreadsheet tracking my option positions by underlying, strike, and expiration. This made it easier to identify potential wash sales myself and verify against what Robinhood reported on my 1099-B. For your AMZN example, buying calls with a different strike or expiration after selling at a loss should generally be fine, but as others mentioned, waiting 31 days is the safest approach if you want to eliminate any risk.

0 coins