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You wrote, To make it more concrete, I wrote some Linn Energy May puts. The stocks action ex-div took them down, into the money. I decided to buy the May puts back to close the position, rather than let it execute. I was still up on the trade, though.

I'm wondering if I can now write June puts at a lower strike, or do I have to wait 30 days because of the wash sale rule.

First, I'm not a tax expert.

With that said, I don't think May and June puts are equivalent. If you read Pub 550, the applicable section on Wash Sales says,

Wash Sales
You cannot deduct losses from sales or trades
of stock or securities in a wash sale unless the
loss was incurred in the ordinary course of your
business as a dealer in stock or securities.
A wash sale occurs when you sell or trade
stock or securities at a loss and within 30 days
before or after the sale you:
1. Buy substantially identical stock or securities,
2. Acquire substantially identical stock or securities in a fully taxable trade,
3. Acquire a contract or option to buy substantially identical stock or securities, or
4. Acquire substantially identical stock for
your individual retirement account (IRA) or
Roth IRA.

In this case, the sold security is a May Put - not the underlying stock. Since you can't buy an option on an option, #3 never applies. Instead you have to have bought substantially identical securities. Which should mean May Puts. So I don't think Wash Rules apply in your example.

- Joel
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