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I did research on the previous posts but could not find an answer that matches my exact situation. I understand IRS definition of wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you buy substantially identical stock or securities, and the identical stock shares purchased is the "replacement" for the shares you sold. However, I am struggling to figure out if the below situation is considered a wash sale.

Activity 1: Bought 80 shares at $250/share on 1/28 (Lot A);

Activity 2: Bought 90 shares at $200/share on 2/17 (Lot B);

Activity 3: Sold 90 shares at $190/share on 2/18 (Lot B);

Within one month before the sale of 90 shares, there are two purchases. However, the purchase Activity 2 (Lot B) was completely sold the next day (Activity 3), and my purpose of purchase Activity 1 was not to replace the shares I sold in Activity 3 as it was a different lot purchased before the lot I sold. Is this still considered a wash sale? If so, should I take the capital loss for 10 shares in Lot B and raise the cost basis of the 80 shares in Lot A? Thanks in advance for the help!

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  • There is a related question already asked on here that might help you solve it.money.stackexchange.com/questions/139308/… – Joseph Casey Apr 1 at 14:33
  • The IRS won't take your word for your claim that the shares you bought on 2/17 weren't to replace the shares you were going to sell on 2/18. That you say it was a different lot doesn't matter to the IRS -- it's the very same security. – David Schwartz Apr 27 at 22:47
  • This is a ridiculous situation of course. No matter whether you were selling the new lot without replacement, or selling the original lot and replacing it, you would have a loss. But the IRS isn't trying to make sense, they're trying to collect taxes. – Ben Voigt Apr 28 at 16:36
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A wash sale violation occurs you purchase a “substantially identical” security or option within a 60 day window around the date that you realize a loss. That's 30 days before and 30 days after the loss. You did that. It's a wash sale.

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