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I have a question about wash sale. When I sold part of my stock A, I triggered wash sale then I got an adjusted cost base for the remaining stock A, say, $1000.

What I found on the internet is that, if I close the position of stock A, I could recover the disallowed loss, which means I could use the adjusted cost basis (in this case $1000) to offset any gains I may have.

For example, if I have $4000 gains so far, after I close the position A, I would have a total gain of $3000. Am I right on this? Thank you so much.

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Yes, you will eventually recover from the wash sale. The loss is just deferred, not eliminated. When you sell your entire position, the only instance where you wouldn't be allowed to realize your entire loss would be if you purchased replacement shares in a tax-advantaged account like an IRA (because any basis adjustment there is irrelevant). This link goes over various scenarios.

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The fact is that if you incur a wash sale, the loss is disallowed and must be added to the cost basis of the second position and carried forward. More on this scenario with various examples can be found at The Motley Fool web site:

https://www.fool.com/taxes/wash-sales-and-worthless-stock.aspx

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    This answer includes a large part of the linked article without making clear that it's a verbatim quote. – nanoman Feb 23 at 3:51
  • Bob - I didn't realize this was 100% lifted from Fool.com. You need to edit it down to a brief citation, or remove it all and just post an original answer. Thx. – JoeTaxpayer Feb 23 at 4:07
  • @Joe taxpayer, How is what I did any different than what you did in this answer? money.stackexchange.com/questions/44484/… – Bob Baerker Feb 23 at 19:12
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    It’s not. I need to re-visit my answer and property edit/summarize. I did that 4 years ago, when I was young and foolish. – JoeTaxpayer Feb 23 at 19:21
  • It seems silly to me to require an original response when an accurate and complete answer already exists elsewhere. Why attempt to fix what isn't broken? But since those are the rules of the road here, I will comply with your request. – Bob Baerker Feb 27 at 16:47

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