I bought 900 shares of (XYZ stock) (a long time ago). I have been writing calls against the stock and they have always expired (worthless, i.e. I made the entire "written price" and for tax purposes I recognize this as a "Short Term Gain" with a trade date equal to the expiration date. My question arises this month because I sold 9 contracts of the DEC 45 Calls for $1 and I am assuming the calls will be valued around $5 at the time of expiration. Assuming this is the case, I am going to Buy-To-Close the position for a loss of $4 per contract or a total loss of (9 contracts x $4 = $3,600). For tax purposes this is a "Short Term" loss of $3,600 with trade dates equal to the sell-to-open date and the buy-to-close date. However, in actuality I am going to sell the JAN 50 Calls. I need to know if the "WASH RULE" applies to this trade (i.e. Am I allowed to recognize the "Short term Capital Loss for the DEC 45's" or do I have to carry this forward to the JAN50's)?
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