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On August 1, we bought 500 shares of X (we already had 1000 shares of X at that
time). On August 31, we sold 500 shares of X at a loss.

Is August 31 within 30 days of August 1 by the wash-sale rules?

The Rule says *within 30 days* and you are at, and therefor within, 30 days. On a FIFO basis (without specific identification) you sold 500 of the originally held 100 shares, not the August 1 purchased shares, and the August 1 shares are the replacement shares for the wash sale you created. Or:
A. Maybe you didn't have a loss on the old shares?
B. Maybe the different lots were with different brokers, or the old ones in a certificate so you actually *did* identify them and therefor NOT have made a wash sale. ed
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