Do IRS wash sale rules apply to gains as well as losses?

External question — Personal Finance Stack Exchange Author: Jason S Original post: https://money.stackexchange.com/questions/126199 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Consider the following two situations: Situation 1 5/1/2018 -- buy 10 shares XYZ at $100 5/1/2020 -- sell 10 shares XYZ at $50 (and claim a long-term capital loss of $50/share) 5/15/2020 -- buy 10 shares XYZ at $70 This clearly falls under IRS wash sale rules : A wash sale occurs when you sell or trade securities at a loss and within 30 days before or after the sale you: Buy substantially identical securities, Acquire substantially identical securities in a fully taxable trade, or Acquire a contract or option to buy substantially identical securities. Internal Revenue Service rules prohibit you from deducting losses related to wash sales. For more information about wash sales, read IRS Publication 550, Investment Income and Expenses (Including Capital Gains and Losses). Situation 2 5/1/2018 -- buy 10 shares XYZ at $70 5/1/2020 -- buy 10 shares XYZ at $50 5/15/2020 -- sell 10 shares XYZ at $100 (and claim a long-term capital gain of $30/share) Is the tax treatment of the 5/15/2020 sale correct? (long-term rather than short-term gain of $50/share)