Consider these transactions all with the same stock:
Buy 100 shares for $1000 on Jan 20, 2016 Sell 100 shares for $ 200 on Feb 20, 2018 Buy 100 shares for $ 100 on Feb 21, 2018 Sell 100 shares for $ 200 on Feb 22, 2018
Does this incur any short-term realized 2018 capital gain for USA taxes?
I know that the total gain is -$700 (i.e., a loss of $700), but I could easily argue for or against claiming a $100 short-term gain alongside a -$800 long-term gain. The wording from IRS Pub 550 is open to interpretation:
More or less stock bought than sold: If the number of shares of substantially identical stock or securities you buy within 30 days before or after the sale is either more or less than the number of shares you sold, you must determine the particular shares to which the wash sale rules apply. You do this by matching the shares bought with an equal number of the shares sold. Match the shares bought in the same order that you bought them, beginning with the first shares bought. The shares or securities so matched are subject to the wash sale rules.
What if I add the following?
Buy 100 shares for $ 200 on Feb 23, 2018
I wouldn't expect this added line to change my short-term gain, but I'm lost in interpretation (and it's even hard to decide if I should pay any taxes based just on the spirit of taxation). Do I need to call the IRS to ask or are my examples already clear?