Robinhood wash sale on options? Am I screwed on tax deduction?

I work with investment taxes and can help clarify this situation. Wash sale rules apply to both stocks and options, but there are some important differences in how they work. For options, the wash sale rule applies when you sell an option at a loss and then purchase a "substantially identical" security within 30 days before or after. The key thing with options is understanding what counts as "substantially identical" - it's not just the same exact option contract. If you sold PYPL call options at a loss and then bought different PYPL call options (even with different strike prices or expiration dates) within the 30-day window, that could trigger a wash sale. To recover the disallowed loss, you need to close ALL positions in substantially identical securities and then wait 30 days before repurchasing. For your situation, that means selling any PYPL options AND PYPL stock, then waiting 30+ days. The $0.00 profit/loss total sounds like a reporting error. Robinhood's tax reporting has improved but still has issues, especially with complex options transactions. You should definitely download your detailed transaction history and review it against what's on your 1099-B.

After dealing with similar issues last year, I found https://taxr.ai really helpful for untangling my options trading mess. I had wash sales across multiple brokerages (Robinhood, TD, and Webull) and couldn't figure out why my 1099s didn't match my actual trading history. The tool analyzed all my trading history documents and showed exactly where the wash sales were happening and which transactions were causing the problems. For the PYPL situation, it sounds like what happened to me with AMD options - the system was flagging wash sales even when I didn't repurchase the same contract. Turns out buying options with different expiration dates on the same underlying stock can still trigger wash sales.

Just wanted to update - I tried taxr.ai after seeing it mentioned here, and it was super helpful. I uploaded my Robinhood CSV file and my 1099, and it found several wash sales that were incorrectly calculated. In my case, they were counting options and stock as "substantially identical" even though the IRS guidance is actually a bit more nuanced. The detailed report showed that two of my biggest "wash sales" shouldn't have been flagged at all because they were different strike prices and expirations more than 30 days apart. I sent this to Robinhood's tax team with the specific transactions highlighted, and they're reviewing it for a possible corrected 1099. The best part was seeing exactly which transactions were paired together as wash sales. Turns out my NVDA trades were correctly marked but my TSLA ones weren't.

If you're still dealing with Robinhood's unresponsive customer service on this, I've had success using https://claimyr.com to actually get through to a human at the tax department. I spent weeks trying to email about an incorrect wash sale calculation, but after using Claimyr to get a callback, I had it resolved in one day. They have a demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. Robinhood's first-level support just reads from scripts, but their actual tax team knows what they're doing once you get to them. The person I spoke with immediately recognized that they had incorrectly calculated a wash sale on my SPY options trades and fixed my 1099 within 48 hours.

Just wanted to follow up - I ended up trying that Claimyr service after continuing to get nowhere with Robinhood's standard support channels. I hate to admit it, but it actually worked. Got a call back in about 25 minutes and was connected to someone in their tax department who could actually understand what I was talking about. The rep confirmed that they've had issues with options wash sale calculations, especially when mixing options and stock purchases of the same company. They're sending me a corrected 1099 that properly accounts for the wash sales that should actually apply. Apparently they've had a lot of these requests this year. So yeah, I was wrong about it being BS. Still think it's ridiculous we need services like this, but it did solve my problem.

For what it's worth, I had a similar situation with options wash sales last year. The key is to understand that wash sales with options usually add the disallowed loss amount to the cost basis of your replacement position. So while you can't deduct the loss right away, it's not "lost" forever. In my case, I had to manually calculate the proper cost basis adjustments because my broker (not Robinhood) didn't apply them correctly. Basically, track: 1. The original loss that was disallowed 2. The position that triggered the wash sale 3. The new adjusted cost basis The real problem comes if you keep triggering wash sales repeatedly and never have a clean 30+ day break, especially at year-end. That can push losses into the next tax year.

Is anyone else shocked at how terrible Robinhood's tax reporting is compared to other brokers? I switched to Fidelity last year and their 1099 actually breaks down wash sales properly and shows which specific transactions were paired together.

I've been through this exact nightmare with Robinhood's wash sale reporting. Here's what I learned after spending way too much time on it: The good news is that your losses aren't permanently gone - they're just deferred through cost basis adjustments. But Robinhood's reporting is notoriously bad at showing this clearly. For your PYPL situation specifically, if you sold PYPL options at a loss and then bought PYPL stock (or different PYPL options) within 30 days, that would definitely trigger the wash sale rule. The $0.00 showing is likely a display bug in their system. My advice: Download your full transaction history CSV and cross-reference it with your 1099-B line by line. Look for any PYPL transactions within 30 days of each other. If you find wash sales that shouldn't be there, document them and escalate to their tax team (not regular support). The silver lining is that if you can close all your PYPL positions (both stock and options) and stay out for 30+ days, you can eventually realize those deferred losses. It's a pain, but the money isn't lost forever. Also, for future reference - consider using different tickers with similar exposure during wash sale periods. Much easier than trying to track all these complex rules across options and stocks.

I'm dealing with a very similar situation right now! I had wash sales flagged on my Tesla options trades where I'm 100% certain I didn't repurchase anything within the 30-day window. It's incredibly frustrating when you're trying to do everything right but the broker's system is making errors. One thing I've learned from this thread is that I should probably be keeping my own detailed trading log going forward. Relying on the broker's reporting clearly isn't enough, especially during tax season when these issues become critical. Has anyone had success disputing wash sale calculations directly with the IRS if your broker won't issue a corrected 1099? I'm wondering if it's worth the hassle or if I should just accept the deferral and plan better for next year. Also, for anyone still confused about the wash sale rules - I found this IRS publication helpful: https://www.irs.gov/publications/p550 (Chapter 4 covers wash sales in detail). The rules are way more complex than most retail traders realize, especially when you're mixing different types of securities on the same underlying asset.