Here are how the transactions should look:
1. 1/1/2020, buy 10 shares of XYZ at price $100, cost $1000
2. 1/2/2020, sell 10 shares of XYZ at price $80, proceeds $800, loss $200. it is wash sale due to next purchase after 1 day.
3. 1/3/2020, buy 30 shares of XYZ at price $50, cost $1500
- 20 shares XYZ $50 = $1,000 basis
- 10 shares XYZ $50 = $500 + $200 (Wash sale) = $700 basis
4. 1/4/2020, sell 30 shares of XYZ at price $40 = total proceeds $1,200
- 20 shares $800 proceeds - $1,000 basis = $200 loss
- 10 shares $400 proceeds - $700 basis = $300 loss
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