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[quote=Anonymous][quote=Anonymous][quote=Anonymous]When you have a wash sale the disallowed loss doesn’t disappear entirely, it is added to the cost basis of the second purchase so when you sell the second lot of stock you won’t owe tax on the amount of the disallowed loss.

For example see this explanation

https://www.schwab.com/learn/story/primer-on-wash-sales[/quote]

PP here. Thanks, though what I'm confused by is what happens when you have successive wash sales that then abruptly end? For example: I have a loss on XYZ stock, then I buy back XYZ stock two days later.  That's a wash sale so it's added to the cost basis of the second purchase. But then what happens to the loss if I sell that second purchase a day after that? I've violated the wash sale rule once again and yet I don't hold any of the stock anymore. If I never buy XYZ stock again, what happens to the disallowed loss? Is it available somehow even though I broke the wash sale rule at every single point in the history of me owning XYZ stock?[/quote]

You haven’t violated the wash sale rule because you didn’t purchase the stock again.

The point of the wash sale rule is to prevent you from taking a loss on your taxes if you haven’t really experienced a loss, but once you sell out of a stock (for at least 30 days) there is no problem with you taking the loss.

Generally speaking if you buy and hold a stock you don’t get taxed on gains while they happen, and you can’t deduct losses while they happen.

The wash sale rule is just saying if you sell the stock at a loss and immediately buy it back you will be treated like you didn’t sell it to begin with. But if you sell it and don’t buy it back then there is no need to have a special rule. [/quote]

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