Investors & landlords

I am going to attempt a 'brief' reply here and then acknowledge rjs as providing the deepest and best reply EVEN THOUGH I did not properly phrase my initial question.  My goal in this reply is largely to make sure a future reader who pulls up this (then closed) note thread receives relatively good advice.

I first phrased my question when I was reviewing a 1099 form from my broker for sales of ETF XYZ.  My question was "If I buy a stock three times and sell it three times all within a one month window at a loss on each sale should not the gain be zero"

I then at the end of that first posting said "So to rephrase my question as simply as possible:  If I were to buy 100$ of an ETF and sell it later (in less than 30 days), is not the correct amount of loss/gain that needs to be reported ZERO.  rjs quickly (and in my opinion after much reading) replied that in this simple case of one purchase and one sale - THERE IS NO WASH SALE.

As to the first phrased question - there were indeed three trades and three sales in less than a month of the same ETF and the sales did close out all positions.  This is where it gets a little complicated.  AND it is further complicated that the 3 trades took place over 2 days and the 3 sales took place over 2 days (which at the point I posted the question, I was so uneducated that I did not know the multiple days were significant....).  I will let rjs speak for himself because he is clearly more qualified BUT he seemed to say or imply that if three trades were made on the same day and all shares were sold on the same day that there was no wash sale.

It was my unforced error - but only at the end of the note thread did I add the complexity of the 3 buys occurred over 2 days and the 3 sales occurred over 2 days with the buys and sells being 9-10 days apart.

I do not really know what the correct answer would be in the complex case - but the broker confused it even further.  My three sales were reported as 5, lots were seemingly unnecessarily divided and extra cost basis was added.  To add insult to injury last in first out (LIFO) was used for the sales.  The broker just told me over the phone, that LIFO does not always apply for shares sold on the same day.  In other words cost basis from lots purchased later on the purchase day were applied to lots sold earlier on the sale day (I only know this from 8 excel spreadsheets where I guessed at cost basis.  This change of ordering for cost basis within the day for sales occurred on the 1099 but apparently not on the monthly statements.  In the end the broker 1099 has 5 sales for the actual 3 sales but the total number of shares matches.  Interestingly, 3 of the reported 5 sales are wash sales.  The amount that could not be claimed from the wash sales matches exactly the added capital gain to the sold shares (across all five sales positions).  2 of the 5 sales actually have a declared loss AND the losses declared match exactly the real loss and are the number that would be reported if I had ignored the wash sales.  So does the wash sale rule apply to my complex case?  The math is identical either way!

So my problem is solved and I hope my lack of education (until I studied) helps a future person.

rjs also recommended in his post a very excellent book from a company called Fairmark entitled "Capital Gains..." by Kay A. Thomas.  The chapter on wash sales was very revealing and I highly recommend that chapter.  While my exact case was not covered, he came so close that I can call it a 'gray area'.  

So thanks rjs -you helped me educate myself and also personally educated me.  From a retiree, that is the highest compliment that I can give.

I will now attempt to mark rjs first post as the best answer.  After that the questions just got too complex as Kay A. Thomas so comments.

John the retiree