I have a wash sale in 2018 as follows (all same stock): 7/1: +704 7/31: -704 8/2: +259 10/1: +704. How do I report the cost basis adjustment to 8/2 and 10/1?

[masotime]

Formatted better:
7/1: +704
7/31: -704 (specific lot on 7/1)
8/2: +259
10/1: +704

Also I'm not sure if the entire sale is disallowed or only 259 shares on 8/2 are disallowed.

[TomYoung · Accepted solution]

It's not really clear what you are telling us here.  If those number all relate to the number of shares and if that sale on 7/31 was at a loss then I'd say the basis of the 8/2 purchase of 259 shares is:

Cost of purchase of 259 shares + (259/704 x loss suffered on 7/31)

The is you get to realize some of the loss on the 7/31 sale and some of the loss is deferred, added to the 8/2 lot.

Tom Young

[masotime]

Thanks Tom, my question was confusing but your answer is helpful. I'll ask a more specific follow up question.