Your knowledge about your tax situation when it comes to your investments is very good. Wash sales are an item where final results cannot be known except by yourself. The broker does know when a wash sale occurs but they don't necessarily know when it ends. When the stock from a wash sale is finally disposed of completely, then you are allowed to take the full loss, if applicable.
For this reason you must review those transactions to make sure the amounts on your return are accurate and reflective of the situation.
Example:
X bought 5 shares of ZZZ stock, at $5 per share, then sold it for $3 per share, however immediately before the original 3 shares were sold, X bought another 5 shares at $5.00 per share.
$25 for the first block of shares
15 is the proceeds creating a $10 loss
The $10 loss is now added to the cost of the new shares for an overall cost basis of $35.
Once the second block of shares is sold (5 shares with cost basis of $35) without any repurchase with in the 60 day window (30 days before or 30 days after the sale), and if they are sold at a loss, then no wash sale exists on the sale, and a loss is allowed.
Please update here if you need further assistance. Our tax experts are here and ready to help.
@DavidH1230
[Edited: 02/16/2022 | 5:18a PST]
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