I understand your point, thank you for the explanation. Does that mean in the scenario provided, that the loss will not be added to the basis of the second 1000 shares bought on the same day at $4.50? So it means that the wash sale does not apply? Is this because both batches were bought on the same day or because the first batch of shares were not sold at the time I bough the second batch? I know too many questions here but please understand that I really want to figure out how this wash sale rule works.
a wash sale example is when you buy say 1000 shares for 5 bucks. then sell it for 4.50. and then buy it right back within 30 days. the .50 loss is dissallowed but is used to lower your new basis by .50. the trigger is buying it right back after taking a loss.
Its is lot easier for you to go to IRS site and get the answer rather than all the know alls (not really) here. Loss of the first pair is added to the basis of next buy of "substantially similar securities" within 30 days.