Wash Sales Clarification: Multiple Sales and Holding Period

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    dturchi
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    Hello All,

    I’m building myself a tool that calculates my crypto transactions for my 8949s and have most things figured out… outside of wash sales. I understand that wash sales are currently not a thing for crypto, however, the Build Back Better Act has the framework to apply wash sales to crypto and I want to be prepared. I understand the general idea of wash sales from reading around on this site, but I had two specific questions.

     

    Firstly, multiple sales at a loss. The IRS provides an example of:

    You bought 100 shares of M stock on September 21, 2020, for $5,000. On December 14, 2020, you bought 50 shares of substantially identical stock for $2,750. On December 21, 2020, you bought 25 shares of substantially identical stock for $1,125. On January 4, 2021, you sold for $4,000 the 100 shares you bought in September. You have a $1,000 loss on the sale.

    I understand that the 100 shares 9/21/20 loss will be divided between the 75 shares of 12/24/202 and 12/21/2020 as explained by the IRS, but let’s say I sell 50 shares 1/5/21 at a loss and then buy 25 more 1/6/21 in the example. Since wash sales must be considered chronologically, all 100 shares from the 9/21/2020 share sale would be reported as a wash sale for the 1/4/21 sale and their cost basis would be split between the 12/24/2020, 12/21/2020 and 1/6/21 purchases, effectively leaving 1/5/21 as a normal sale correct? And just to complicate things further, lets say the 1/6/21 sale was 50 shares instead. Would the additional 25 shares trigger the 1/5/21 sale as a wash sale and its cost basis be added to those shares?

     

    Secondly, and much more simply, I am wondering how I would report the date acquired for the 8949 of the sale of the shares that triggered a wash sale due to the holding period clause. So for example:

    1/1 – buy 100 shares; 3/1 – sell 100 shares at a loss; 3/2 – buy 100 shares; 5/1 – sell 100 shares;

    On the 8949, I’d obviously make the 3/1 loss have an acquired date of 1/1, mark column (f) with a ‘W’ and make the net a 0. However, the sale on 5/1 sells the shares that triggered the wash sale. Would that also have an acquired of 1/1, not require an adjustment (f) and have the final net gain/loss?

     

    Many thanks to all who assist!

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