# Further Understanding of Wash Sale Rules

First let's make sure I understand a Wash Sale:

Let's say I invest in 100 shares of ABC stock for \$100 and after a week sell the 100 shares of ABC for \$70, I've lost \$30 which I can deduct from my taxable income come tax time. However, if I reinvest into ABC for ANY amount within 30 days of exiting ABC for a loss there is a wash sale which means I can no longer claim the original \$30 loss as a loss.

Considering that is all correct, here is my theoretical scenario:

Let's say I buy 100 shares of ABC at \$1 a share and at the end of the day I sell all 100 shares of ABC at \$0.70 (30% loss). On the following day I buy 100 shares of ABC at \$0.70 a share and sell at the end of the day when ABC is at \$1 a share (30% gain). Let's theorize that this loss / gain cycle repeats consecutively for 8 additional days so at the end I have the following:

• Lost \$30 dollars every other day starting with day 1 and felt -\$150 over the 10 day span.
• Gained \$30 dollars every other day starting with day 2 and felt +\$150 over the 10 day span.

Per wash sale rules I cannot claim ANY wash sale loss because on the last day I invested in ABC and made a profit.

Knowing I cannot claim any losses, my question is: Do I have to pay taxes on all of the gains? That is, will I still have to pay taxes on \$150 dollars even though I only ended up gaining a net total of \$0 from the time I started?

Here is a visual example of my scenario:

``````Day:      | 1    2    3    4    5    6    7    8    9    10
Loss:     | -\$30      -\$30      -\$30      -\$30      -\$30
Gain:     |      +\$30      +\$30      +\$30      +\$30      +\$30
Felt Loss | -\$30      -\$60      -\$90      -\$120     -\$150
Felt Gain |      +\$30      +\$60      +\$90      +\$120     +\$150
Net Gain  | -\$30 \$0   -\$30 \$0   -\$30 \$0   -\$30 \$0   -\$30 \$0
``````
• At the end of the the 10 days have you sold all of your shares of ABC? Commented Oct 15, 2015 at 19:59
• Possible duplicate of Wash Sales and Day Trading Commented Oct 15, 2015 at 20:07
• @stannius Yes. After day ten I would own no stock in ABC and would have exited with a net gain of 0. Commented Oct 16, 2015 at 17:12