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Day 1: I purchased 100 stocks of ABC for 100$. The stock went down and I purchased additional 100 shares for say 80$.

Now, my average is 200 shares for 90$.

Day 2: The stock went up and I sold all 200 shares for say 95$. I made an overall profit of 1000$ on the sale of all 200 shares. My question is would I be incurred a "wash sale" loss if I try to buy again the shares of ABC for say 90$. For the reason that although I earned a profit but I sold my first 100 shares for a loss of -500$?

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Yes. You sold 100 shares for +$1,500 and 100 shares for -$500. If you buy again within 30 days you will have to top up the cost basis with the $500 loss.

The average is irrelevant.

  • Would the wash sale loss be incurred on the selling of 200 shares here, even if I don't buy new shares after selling? – PrasSFO Jun 21 at 20:08

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