As wash sales are generated, the amount of disallowed loss transferred to an open lot is tracked and recorded as the current cost fields are updated. For example, suppose a lot holding has a current cost of $10000.00 with $500.00 contributed by a wash sale adjustment and that half of the holding is closed. The lot cost is reduced by $5000.00 and the wash disallowance is reduced by $250.00. The disallowed loss reduction is reported and the remaining disallowed loss remains available on the open holdings. NOTE:
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As the lot decrements, due to subsequent sale or close transactions, the amount of remaining disallowed loss is proportionately reduced. |