USO and UCO are both in the same Oil industry, but they would not result in a wash sale. That would be like comparing Fedex and UPS. They are separate securities.
A wash sale occurs when an investor sells a security at a loss for tax benefits. The IRS instituted the wash sale rule to prevent taxpayers from abusing wash sales. Investors who sell and then repurchase the same security within 30 days cannot count any capital loss on the transaction against any capital gain.
To compensate for this, the cost basis of the newly acquired stock is increased by the amount of the loss.
Often the broker's software will help make this adjustment resulting from a WASH SALE, but yes you should keep track of the wash sales and you correctly stated how to calculate the adjustment.
- To make this adjustment in the TurboTax software you would enter the transaction exactly as it show on the 1099-B.
- After entering the data there is a bar at the bottom of the screen that says "I'll enter additional info on my own."
- Toward the bottom there is an option to "Correct The Cost Basis".
- You can make the adjustment here.
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