The TradeMatcher software includes a Wash Sale filter capability which may be applied at the user's discretion. This filter must be used with care and the results should be treated for informational purposes for the assistance of your tax professional! While software filters can help identify wash sale issues, the final determination always requires personal guidance.
There are several reasons for caution regarding the application of the wash sale filter.
First, not all classes of traders are subject to the wash sale rules. Second, an absolute and precise application of wash sale rules will always require professional review because it can apply across not just identical securities, but those which are "substantially identical." Even the IRS states that: "In determining whether stock or securities are substantially identical, you must consider all the facts and circumstances in your particular case..." Finally, in order for the wash filter results to be correct, you must include 30 days of trade data prior to the period in question and 30 days after (and the 30 days of prior trades must have been properly adjusted for wash sales previously). Thus, this situation should be approached with extreme care. As they say, garbage in, garbage out.
That said, the wash filter applied in software here will identify and adjust wash sale transactions for the same identical security (i.e. where the symbol is exactly the same). Because the wash period may not be limited to a calendar year, the filter creates a worksheet from the transactions and the user should select that range of the worksheet needed for reporting.
Again, ultimately, the determination of whether a transaction is or is not absolutely a wash sale transaction requires professional advice and judgement. The filter the TradeMatcher uses is not a substitute for that advice, but should be used as a guide for your professional's review! Any purely mechanical filter can only serve as a guide to a trained professional. Competitor's may suggest otherwise, but there is simply more to the "wash sale" rule than a pure mechanical application!
Remember, no legal or accounting professional opinion or service is provided by this software! Consult your own professional accordingly!
