QQQ Household Wash Sale Across Brokers
PROOF LOG #022
QQQ Household Wash Sale Across Brokers
One household. Two custodians. One hidden wash-sale path.
One custodian sees a clean loss sale. Another sees a clean buy.
FDL carries the CPA-prepared household wash-sale position across accounts.
One household. Two custodians. One hidden wash-sale path.
In this QQQ case, one spouse sells QQQ at Morgan Stanley for a $680,000 loss. Ten days later, the other spouse buys QQQ at Schwab.
Each broker can look clean.
The household ledger is not.
FDL carries the CPA-prepared taxable-spouse household wash-sale position through Tax Report, Tax Alpha Dashboard, and Audit Trail.
Proof Summary
Problem: A household wash-sale path can stay invisible when one broker sees a loss sale and another broker sees a replacement buy.
Prepared input: FDL reviews the household records in one prepared run, with a taxable spouse replacement account and no IRA replacement.
Board result: Tax Report shows Code W and a $340,000 adjustment, while Tax Alpha Dashboard and Audit Trail show the denied / preserved basis path.
Boundary: FDL does not make an automatic legal conclusion about every spousal trade. It supports a CPA-prepared household wash-sale reporting position for prepared, in-scope records.
WATCH THE RECONSTRUCTION
Watch a broker-clean QQQ loss become a household wash-sale path.
This proof assumes a taxable spouse replacement account, no IRA replacement, and a CPA-prepared household wash-sale reporting position.
- brokers saw separate accounts
- one spouse sold QQQ at a $680,000 loss
- the other spouse bought 5,000 sh QQQ within the wash-sale window
- $340,000 of loss was denied under the prepared household position
- $340,000 was preserved into the replacement lot
- Tax Report shows Code W and the $340,000 adjustment
- Tax Alpha Dashboard shows the denied / preserved path
- Audit Trail shows the replacement basis path
EXECUTIVE PROOF
Broker / Surface Risk
- Morgan Stanley sees a QQQ loss sale
- Schwab sees a QQQ buy
- neither broker sees the household path
- both broker surfaces can look clean
FDL Registry of Truth™
- household accounts are reviewed in one prepared run
- QQQ replacement path is detected
- Tax Report applies Code W
- Tax Alpha Dashboard shows denied and preserved loss
- Audit Trail carries preserved basis into the replacement lot
PHASE 1 — THE CLEAN BROKER SURFACES
One account sells QQQ at a loss.
Another account buys QQQ ten days later.
Each custodian sees only its own record.
Separate broker files can look clean while the household path is not.
PHASE 2 — THE HOUSEHOLD WASH-SALE POSITION
The proof assumes a taxable spouse replacement account.
No IRA replacement is involved.
Under the CPA-prepared household wash-sale position, 5,000 replacement shares trigger a partial adjustment.
FDL carries the prepared position through the household ledger.
PHASE 3 — THE REVIEWABLE PATH
Tax Report shows Code W and a $340,000 adjustment.
Tax Alpha Dashboard shows the denied / preserved path.
Audit Trail shows the replacement basis path.
FDL makes Code W and preserved basis reviewable.
FORENSIC EVIDENCE
What must remain intact
- Household scopeThe QQQ loss sale and replacement buy must be reviewed in one household run.
- Taxable spouse accountThe replacement purchase is assumed to be in a taxable spouse account, not an IRA.
- Partial matchingOnly the 5,000 replacement shares are matched against the 10,000-share loss sale.
- Prepared legal positionThe household wash-sale treatment is a CPA-prepared reporting position.
What FDL makes legible
- Tax ReportShows Code W and the $340,000 wash-sale adjustment.
- Tax Alpha DashboardShows $340,000 Wash Sale Loss Denied and $340,000 Wash Sale Loss Preserve.
- Audit TrailShows the replacement lot basis moving from $475 to $543.
- TransactionsShows one household, two custodians, and one QQQ replacement path.
This is the point of the white-box architecture:
broker-clean records, household-level path, filing adjustment, and preserved basis stay separate and reviewable.
WHY THIS CASE MATTERS
For UHNW households, wash-sale exposure does not stop at one custodian.
The dangerous version is quiet: one broker sees a loss sale, another sees a buy, and neither sees the full path.
The question is not only whether each 1099-B looks clean.
The question is whether the reviewer can see the household ledger.
WHAT FDL IS SHOWING HERE
FDL is not making an automatic legal conclusion about every spousal trade.
FDL is not modeling IRA replacement purchases.
FDL shows how a CPA-prepared taxable-spouse household wash-sale position moves through Tax Report, Tax Alpha Dashboard, and Audit Trail.
The value is making the cross-custodian wash-sale path reviewable.
CHOOSE YOUR NEXT STEP
FDL — deterministic tax infrastructure for prepared, in-scope records.