To enter the Wash Sale:
You do not adjust the cost basis from the 1099-B.
- The Wash Sale is the reporting of a transaction that is restricted by the IRS..
- Your broker's software should keep track of the wash sale and make the basis adjustment as it develops.
- When you finally dispose of the underlying stock, and it doesn't fall within the Wash sale window.
- You will realize the gain, or loss based on the adjusted basis.
A Wash sale is not a credit for losses, but rather is an increase in the basis of the underlying stock. If you close the Wash Sale in 2023, the profit or loss will be based on the sale price and the adjusted Wash Sale Basis.
See Wash Sale Rules Section 1091(a) on page 6 IRS: Application of Wash Sale Rules to Money Market Fund Shares
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