If you bought and sold the same stock multiple times within a 30 day period, each at a loss, how do we treat those losses?
I see clear examples of being able to add the loss of the first to the second transaction if a capital gain was made, but what if the second sale transaction was also at a loss? What if you make 4 transactions, all at a loss?
Do the losses for each transaction accumulate like a snowball and get added onto each subsequent sale to calculate if a gain/loss has actually been made? And what if a gain never happens (the last transaction ends up being less than the cost paid during the first transaction)?
Example transactions (within 30 day timeline):
1/1: Buy 3 Amazon shares, at $500/share
1/5: Sell 3 Amazon shares at $450/share
1/5: Buy back 3 Amazon shares at $420/share
1/6: Sell 3 Amazon shares at $400/share
1/7: Buy back 3 Amazon shares at $390/share
1/8: Sell 3 Amazon shares at $440/share
I see clear examples of being able to add the loss of the first to the second transaction if a capital gain was made, but what if the second sale transaction was also at a loss? What if you make 4 transactions, all at a loss?
Do the losses for each transaction accumulate like a snowball and get added onto each subsequent sale to calculate if a gain/loss has actually been made? And what if a gain never happens (the last transaction ends up being less than the cost paid during the first transaction)?
Example transactions (within 30 day timeline):
1/1: Buy 3 Amazon shares, at $500/share
1/5: Sell 3 Amazon shares at $450/share
1/5: Buy back 3 Amazon shares at $420/share
1/6: Sell 3 Amazon shares at $400/share
1/7: Buy back 3 Amazon shares at $390/share
1/8: Sell 3 Amazon shares at $440/share