Why Form 1099-B shows that disallowed wash sale exceeds total loss?

Cost basis is the original value of a security or other asset used for tax purposes to determine whether a capital gain or loss has been realized when that asset is sold or disposed. Depending upon the tax regulations, the cost basis may be adjusted for commissions, wash sales or corporate actions such as stock splits and return of capital distributions…

Your statement is likely not reflecting your loss due to a “wash sale” A sale of stock or securities is considered a "wash sale" if a trader sells shares or securities at a loss and purchases the same or equivalent shares or securities within the 61-day wash sale period, which includes the 30 calendar days before the sale, the day of the sale, and 30 calendar days following the sale. When the loss on the sale is deferred, the amount of the loss is added to the cost basis of shares purchased during the wash sale period ("replacement shares"). Upon the sale of the replacement shares, the disallowed loss is incorporated into the calculations of the gain or loss on the replacement shares and recognized. Additionally, the holding period of the original shares is added to the holding period of the newly acquired shares or securities…

The cost basis of a security may change due to a corporate action such as stock split, spin-off, return of capital or a merger resulting in a change in share quantity. The cost basis will also change (increase) in the event of a wash sale. Other actions which can change the cost basis of your position include a dividend reinvestment or other addition to the share position (e.g., purchase or option exercise)…

B: The basis shown in box 3 of Form 1099-B is incorrect. For example a wash sale is unreported on Form 1099-B, because the original purchase was a noncovered security and the replacement purchase is a covered security. The basis reported on Form 1099-B for the covered security will not include the disallowed loss from the sale of the noncovered security…