Wash Sale Rule Question


Hi, I am learning stocks and came across the wash sale rule. I read several articles on the wash sale rule and I think I understand it except for one thing. I am still a bit confused on whether the Wash Sale Rule applies to my entire position or individual stocks.

For example, if I do the following, will this trigger the wash sale rule?

1) Buy 3 shares of a company at $50, $100, and $150 respectively. Cost basis is $100.

2) Sell my entire position at $110 for a capital gain of $30 bucks ((110 – 100) * 3). Note that the share I bought for $150 was sold at a loss of $40.

3) Re-buy shares for the same company at $80.

4) Sell shares the next day for $100.

My initial thought is that since I sold my entire position for a capital gain of $30 bucks (even though one share was sold at a loss), then I should be free to re-buy and sell without being flagged for the Wash Sale Rule but just wanted to confirm to avoid any possible tax penalties in the future.

Thanks in advanced!!


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