So if you have a repeating wash sale for 10 months and even close out the positions in NOV, the only way to recover is to buy the same security after 31 days of no (open trade) and have gain or (losess with no wash sales) on the next batch of sales? when does the cost basis go back to zero?
when you close a position any previous wash sale loss is included in the tax basis for determining gain or loss. If there is a net gain (including any previous wash sale loss included in the tax basis) there is no more wash sale loss to deal with even if substantially identical securities are purchased (or perhaps sold if a short sale was involved) within the 31 days of that closing. if there is a net loss (including any previous wash sale loss included in tax basis) on closing out a position you must wait the 31 days to reestablish that position to avoid again triggering a wash sale. Do this and any wash sale loss included in tax basis on the closing of that position is recognized.
dividends, except return of capital dividends which reduce tax basis, should not affect wash sales except if they are reinvested.
when there is a wash sale on a long position the holding period of that security tacks on to the holding period of the purchase of the security that triggered the wash sale. With multiple wash sales with a position over a period of time the holding periods keep tacking on. So repeated wash sales can convert short-term to long-term.
