We talked with a potential client today. He made $500,000 cash in 2025. His 1099 says -13,000 realized gain and $500,000 disallowed losses. AI told this person that -13,000 is correct.

So, the tax on real profits of $500,000 and a $500,000 wash sale violation is $0? This is because Fidelity has inflated the cost basis by $500,000.

Wash sales are confusing. Ignoring them is bad enough, but information from AI and Fidelity mistakenly combined eliminated all taxes for that year. Really?? Don’t fool yourself, the Wash Sale rule is a penalty, not a bonus.

Please plan ahead, use a human professional consultant, don’t completely trust AI and don’t believe something that is too good to be true.