I knew how wash sale work in simple example. But how about in this example:
I lost $1000 for selling Share X. Within 30 days, I purchase it again, this time I gain $500 for selling it.
Again, within 30 days after I sold the second time, I purchase it again, this time I lost $1000 again for selling it.
If from now on I stopped to purchase this stock, I had no problem to calculate, but I decide to purchase it again within the 30 days from previous transaction, and this time I decide to hold it for a long long term.
I knew wash sale won't apply to stock gain, so in my situation, I had gain $500 between, but lost $2000 total, the net lost is $1500. When it came to tax for the wash sale, will IRS tax me for the $500 gain at the end of the year while i am still holding this stock? If IRS did, it sounds very unfair to me, since I had lost $1500.