So I accidentally created a wash sale last month in my Vanguard non- tax-advantaged account: I sold the total stock fund near its all-time high, even though I had an automatically reinvested dividend from less than 30 days earlier. Vanguard's Cost Basis report displays the wash sale and says that its year-end 1099 will disallow the appropriate amount of capital loss -- $1.42, if I remember right.
But I looked further on the site, and they say that they don't or can't diagnose wash sales when the sale and the purchase happen in two different accounts of the same investor. So my question is, if Vanguard doesn't keep track of them, how would the IRS get the information? Is this something where the taxpayer either does the right thing or not, and short of an audit the IRS takes their word for it?
Just to be clear, this is a theoretical question to satisfy my curiosity. I don't actually have any other wash sales between that account and my Vanguard IRAs.