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

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.

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!

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.

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.

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.

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.

Is anyone using specific tax software to track option wash sales? I tried TurboTax last year and it seemed to just accept whatever Robinhood reported without any analysis. Considering TaxAct this year but not sure if it handles options any better.

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.

Great discussion here! As someone who's been trading options for a few years and dealt with wash sale headaches, I wanted to add a practical tip that's helped me avoid issues. One strategy I use is the "strike ladder" approach when I want to maintain exposure to an underlying after taking a loss. Instead of buying the exact same strike again (which could trigger wash sales), I'll buy options at strikes that are $5-10 away from my original position. This clearly establishes them as different securities while still giving me similar market exposure. For example, if I sell AAPL $150 calls at a loss, I might buy $155 calls or $145 calls instead. The economic outcome is very similar, but there's no question about the wash sale rule since the strikes are clearly different. Also wanted to echo what others said about keeping your own records. I learned this the hard way when Robinhood flagged some of my TSLA trades as wash sales even though they had different expirations. Having my own documentation made it easy to correct on my tax return. The 31-day rule is always the safest if you're unsure, but understanding the "substantially identical" test for options gives you more flexibility in your trading strategy.

I've been dealing with options wash sales for the past year and wanted to share something that might help others avoid a mistake I made early on. I was being overly cautious and treating any options on the same underlying as potentially triggering wash sales, even when they had completely different strikes and expirations. This led me to either wait the full 31 days (missing opportunities) or avoid certain trades altogether. What I learned is that the key is documentation and understanding the actual rules rather than being paralyzed by uncertainty. I now keep a simple trading log that notes the exact contract specifications for every option trade. When I sell at a loss, I can quickly check if any subsequent purchases within 30 days have identical strikes AND expirations. The reality is that most active options traders naturally avoid wash sales just by the nature of how we trade - we're constantly adjusting strikes based on market movement, trading different expirations based on volatility expectations, etc. The scenarios where you'd accidentally trigger a true wash sale (identical underlying, strike, AND expiration) are actually pretty rare unless you're literally buying back the exact same contract. My advice: don't let wash sale fears prevent you from making good trading decisions. Just keep good records and understand that different strikes OR different expirations generally mean you're in the clear.

This whole thread has been incredibly enlightening! As someone who just started trading options a few months ago, I was completely overwhelmed by wash sale rules and honestly avoiding certain trades because I wasn't sure if they'd trigger issues. Reading through everyone's experiences, it's clear that the key points are: 1. Different strike prices OR different expiration dates generally mean no wash sale 2. Keep detailed records of your trades 3. Don't let wash sale fears paralyze your trading decisions 4. Broker reporting (like Robinhood) can be inaccurate in both directions I'm definitely going to start tracking my own trades in a spreadsheet like several people suggested. The "strike ladder" strategy also sounds brilliant for maintaining similar exposure while clearly avoiding wash sale issues. One thing I'm still curious about - for those of you who've been through multiple tax seasons with significant options trading, how often do you actually encounter true wash sale situations in practice? It sounds like with normal trading patterns (adjusting strikes based on market moves, different expiration strategies, etc.), accidentally triggering wash sales might be less common than I initially feared. Thanks everyone for sharing real experiences instead of just regurgitating generic tax advice!

This has been such a helpful thread! I'm fairly new to options trading and was getting stressed about wash sale rules after reading some horror stories online. Your AMZN example is very similar to what I've been doing with NVDA options. I've been trading different strikes and expirations on the same underlying and was worried I was creating a tax nightmare. But based on what everyone's shared here, it sounds like as long as either the strike OR expiration is different, I should be fine. One question though - if I'm doing spreads (like buying a call and selling a call at different strikes on the same underlying), does the wash sale rule apply to each leg separately? Or is the entire spread position considered when determining if there's a wash sale? Also want to thank everyone for emphasizing the importance of keeping your own records. I just started a simple spreadsheet tracking all my option trades with the details you mentioned. Already caught a discrepancy between my records and what's showing in my account!

Great discussion everyone! I wanted to add one more practical consideration that I learned the hard way - timing matters a lot with wash sale rules, especially around year-end. If you're planning to harvest losses in December, be really careful about your January trades. I made the mistake last year of selling some losing MSFT calls in late December, then buying similar MSFT calls in early January thinking I was fine since it was a new tax year. Turns out the 30-day wash sale window crosses tax years, so those January purchases disallowed my December losses. This is particularly tricky with options since we often have similar trading patterns week to week. My advice: if you're harvesting losses in December, either wait until February to trade that underlying again, or make sure your new positions have clearly different strikes AND expirations. Also, for anyone using tax software, double-check the wash sale calculations manually. TurboTax missed this cross-year wash sale in my case, and I only caught it when reviewing my forms before filing. Could have been a costly mistake if the IRS had noticed it first! The record-keeping advice everyone's shared here is golden - having detailed logs made it much easier to identify and correct these issues.

I've been trading options for about a year and ran into this exact same confusion! Your understanding is correct - options with different strike prices OR different expiration dates are generally not considered "substantially identical securities" for wash sale purposes. In your AMZN example, buying calls with a different strike or expiration after selling at a loss should typically not trigger a wash sale. The key is that they need to be identical in ALL aspects (underlying, strike, expiration, call/put) to be substantially identical. That said, I'd recommend keeping detailed records of your trades just in case. Robinhood's wash sale reporting can sometimes be overly conservative and flag trades that aren't actually wash sales according to the IRS rules. I learned this when they incorrectly flagged some of my SPY trades with different expirations. For extra safety, many traders use the "strike ladder" approach - if you want to maintain similar exposure after a loss, buy options with strikes that are $5-10 away from your original position. This makes it crystal clear they're different securities while giving you similar market exposure. The 31-day wait is always the safest approach if you're unsure, but understanding these nuances gives you much more flexibility in your trading strategy!

I've been trading options for about 6 months now and this thread has been incredibly helpful! I was definitely overthinking wash sale rules and being way too conservative with my trades. Just to add another data point - I had a situation last month where I sold TSLA $250 calls at a loss on a Monday, then bought TSLA $255 calls the next day. I was worried this might be a wash sale, but after reading through everyone's experiences here, I'm now confident that the $5 difference in strike price should make them clearly different securities. What really clicked for me is understanding that the "substantially identical" test is quite strict - it's not just about the underlying stock, but the specific contract terms. This gives us a lot more flexibility than I initially thought. I'm also going to implement that spreadsheet tracking system several people mentioned. It sounds like having your own records is essential, both for catching broker errors and for your own peace of mind during tax season. Thanks to everyone who shared their real-world experiences - this has been way more valuable than the generic wash sale advice I found elsewhere!