The above states that you bought 2,187,608.44 in securities and sold them for a loss at 2,121,495.69. If you did not have any wash sales, then this would yield a loss of 2,121,495.69 - 2,187,608.44 = -66,112.75 Wash sales are treated as additional profit and therefore decrease the net loss. Thus, the net loss you are eligible to claim is -66.112.75 + 61,492.95 = -4,619.80 Unfortunately, this is above the 3,000 maximum per year that you are allowed to claim. You should be able to carry, the remainder of the loss forward to next year.

As others have stated, a wash sale occurs whenever you sell a security for a loss, but then repurchase it within 30 days. In these cases, the amount of the loss from the sale is applied to your new cost basis and is treated as a profit for tax purposes. For e.g., if you purchased 100 shares of a stock at $5 for $500, sold them for a $200 loss at $3 a share, and repurchased 100 shares at $1 a share for $100 within 30 days of the sale, you will not be able to claim the initial $200 loss. Instead, your cost basis on the 100 shares purchased will be $100 + $200 = $300 or $3 per share. Only once you sell those shares, will you be able to realize the loss based on the adjusted cost basis.

That said, you clearly do a lot of trading. As such, you should probably consider using a broker that allows specific share identification for shares sold. The IRS assume that if you do not specifically identify shares sold, that you are selling them in a FIFO (First In First Out) method. For e.g., if you buy 100 shares at $5, then buy 200 more shares at $2, and sell 200 shares at $3, the IRS will assume that you sold the initial 100 shares bought at $5 with 100 shares bought at $2 which would yield a net profit/loss of -$100. If you were specifically identifying shares sold, you could sell 33 shares from the 100 bought at $5 with 67 shares bought at $2 for a $1 profit. Note: with the FIFO method, you would incur a wash sale if you bought some more shares later.