Wash sales seem to have very weird behavior, here's an example. It uses all the same stock, and there are no other holdings besides those mentioned.
Day 1, buy 100 shares for $200 each, so $20,000 total
Day 2, sell 1 share for $7, so a $193 loss
Day 3, sell 99 shares for $201 each, so a $1 gain per share, or $99 gain total
Now to analyze this for wash sales. There is only a single loss sale, the one on day 2. Are there any buys in the surrounding 61 day period? Yes, the day 1 buy. I assume that the sell cannot be washed by the buy of its own share, so I think it must be washed by one of the other 99 shares in that buy.
So transfer the the $193 loss onto one of the other shares, now when that share is sold it isn't a $1 gain, it is a $192 loss. Now analyze this loss for wash sales.
This process keeps repeating, and you end up with 99 wash sales all chained together, and a single non-wash sale ending the chain, with a loss of $94.
Is this right? Can 1 buy and 2 sells lead to 99 wash sales?
Edit: Bob Baerker suggested a to apply a new rule that "a buy cannot wash a sale if that sale is selling shares acquired in that same buy". Applying that rule means the earlier example has no wash sales. But different examples can have essentially the same effect, even with this new rule, here's a new example:
Day 1, buy 50 shares for $200 each, so $10,000 total
Day 2, buy 50 shares for $200 each, so $10,000 total
Day 3, sell 1 share for $7, so a $193 loss (treat this as coming from the day 1 lot)
Day 4, sell 49 shares for $201 each, so a $1 gain per share, or $49 gain total (treat this as coming from the day 1 lot)
Day 5, sell 50 shares for $201 each, so $1 gain per share or $50 gain total (treat this as coming from the day 2 lot)
The day 3 sale is a loss, and for wash sale purposes we ignore the day 1 buy (because of the new rule), and treat it as being washed by 1 share of the day 2 buy. Now transferring the $193 loss to its sale, that means 1 share of the day 5 sale has a $192 loss instead of a $1 gain.
Now analyze this day 5 loss for wash sales. We ignore the day 2 buys (because of the new rule) and see that it gets washed by 1 share of the day 1 buy. So transfer the $192 loss, and one share of the day 4 sell gets a $191 loss instead of a $1 gain.
This keeps repeating and we end up with 99 wash sales all chained together, ending with a single non-wash sale. The single final non-wash sale has a loss of $94. This is essentially the same result as the previous example. We just had to divide the buys and sells in half and alternate back and forth between those in order to never have a buy directly washing a sale of its own shares.