@fanfare @sagetek - let me see if I can create an example as I suspect Vanguard is doing it correctly but there is a misunderstanding on how this settled out:
- I buy 10 shares of ABC company for $100 on Oct 1. My cost basis is $1000
- I sell those same 10 shares of ABC Company for $50 on Nov 28. My tax loss is $500
- However, I turn around and buy 10 shares of ABC Company at $70 on Nov 30. My cost basis is $700. That creates a wash sale! So the $500 loss I created on Nov 28 is negated and my adjusted cost basis on this new lot is adjusted upwards by the $500 to $1200.
- On Dec 2, I sell the 10 shares I own in ABC Company for $75 per share. Since my adjusted cost basis is $1200 and my proceeds are $750, my tax loss is $450.
- I do not buy any more shares of this company.
let's summarize:
two purchases: $1000 for the first purchase and $700 for the 2nd purchase
two sales: $500 in proceeds for the 1st sale and $750 for the 2nd sale
$1000+ $700 - $500 - $750 = $450 loss..... which is the same tax loss I noted above!
I suspect Vanguard reported it correctly (they are too big to have millions of people complain!)
