So far here's what I know about wash sales. If you sell a stock at a loss and buy the same or similar stock within 30 days, its considered a wash sale. The loss you incurred from the sale gets added to the cost basis of the new replacement stock you purchased. This is easy enough if you bought the same number of shares that you sold.

1. Is the loss carry over proportionate?
For example
Jan 1 Sold 100 share of XYZ stock and lost $1000. $10 loss per share
Jan 20 Bought 50 shares of XYZ stock at $20. The loss from the sale gets carried over proportionately? The cost basis for the 50 replacement stocks is $20+$10 carry over = $30/ share. Is this correct?

2. If the above is true, lets say I do no buy any more shares of XYZ stock. What happens to the other $500 loss from the Jan 1 sale that was never applied to replacement shares? How do I report this loss? Do I not get to claim this loss?

You help is appreciated.

If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities.

Out of 100 stocks sold, only 50 stocks are wash sale, since you bought 50 identical stocks.
So your cost basis of new stocks is $30 per stock.

Quote:

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Originally Posted by MukatA

If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities. The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities.

Out of 100 stocks sold, only 50 stocks are wash sale, since you bought 50 identical stocks.
So your cost basis of new stocks is $30 per stock.

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I have that part down, let you confirm what happens to the other half of the loss from the sale since I did not buy back 100 shares. Do I get to record half of the loss on the sale since technically half of the sale was a wash sale because I only bought 50 similar stocks and not the full 100 stocks.

Yes, half of 100 stocks sold is not wash sale because you did not buy those stocks within 30 days.