I bought a 100 stock on 3/5/08 for $10 and sold it for $12 on 3/17/08. I have a profit of $200. Then I bought the same 100 stock on 3/20/08 for $9 and sold it for $5 on 3/30/08. The loss this time is $400. Is the loss from the second sale is wash since it is less than 30 days to the purchase date of the first transaction (3/5/08). OR

I report $200 profit from the first sale and then
Can I take the deduction of $400 from the second sale?

PLEASE HELP

You report it as a wash sale. It would be clearest to report the second transaction first - you show a loss of $400, then below that on the next line write "Wash Sale" and show the disalllowed loss of $400 as a positive amount in column (f). Then list the other transaction, but increase its cost basis by $400, so it will end up being a loss of $200. When you add the results for all 3 lines you'll end up with a combined loss of $200, which is precisely what you would get by ignorong the wash sale rules. But this way it is made clear to the IRS that you followed the rules.

For reference, read the section on wash sale rules here:
Publication 550 (2008), Investment Income and Expenses (http://www.irs.gov/publications/p550/ch04.html#en_US_publink100010601)