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Total losses deferred to next year are zero.

 
There are only two situations in which wash sales will affect your year-end gains and losses:
 
  • You sell a stock at a loss in December and then buy it back in January.
    If you sell a stock at a loss in December and then buy it back in January (within the 30 day window), the loss is disallowed for the current tax year and has to be moved forward, and can only be realized in whatever year that you finally dispose of the shares that you bought in January. The same rule applies when you close a short sale at a loss in December and then enter into another short sale in January (within the 30 day window).
     
  • You hold shares open at year-end that have accumulated wash sales.
    If you lose on a trade at any time during the year, then buy back the same security within the 30 day window and hold these shares open at year end, the entire loss is disallowed for the current tax year. The losses now have to be moved forward to the open position, and can only be realized in whatever year that you finally dispose of the shares that you re-purchased.
     
In either case the loss is disallowed for the current tax year and needs to be deferred to a future tax year. If you have run the Gains and Losses Report and you see wash sale entries, but the total loss to be deferred to the next tax year is "zero", you ended a string of wash sales during the current tax year and did not hold any shares with wash sale losses attached to them open at year-end
 
For more information regarding how wash sales can affect your capital gains and losses, please see the articles on Wash Sales in our Tax Topics section.