Messed up wash sale.

[ADK44]

My investments are with Fidelity and I use Turbo Tax to file.

I need help dropping the loss I used to offset gains .

On 12/19/22, I received a Fidelity SOXX dividend of about $218 which was reinvested into SOXX the same day (I did not realize that that happened).

On 12/21/22, I sold about $35,000 of the SOXX (at a $10,000 loss).

In the following months, I filed my tax return, including Schedule D, via Turbo Tax. By then I had seen my wash sale violation but assumed that the Fidelity forms I imported took care of everything. But they did not. I did not realize that I was not supposed to use the loss against my gains.

At this point, I do not know how to amend my return, or what I should do.

[rjs · Accepted solution]

Only a small part of the loss is disallowed - just the part attributable to the sale of the shares that you purchased on 12/19. The remaining loss can still be used to offset gains. The disallowed wash sale amount should be shown on the 1099-B entry for the 12/21 sale. How do you know that Fidelity did not make the wash sale adjustment?

Look at Form 8949 in the tax return that you filed. In the entry on Form 8949 for the 12/21/22 sale, the disallowed loss should appear in column (g) with code W in column (f). If it's there, everything is okay and you don't have to do anything. The loss shown in column (h) is the net loss that you are allowed to claim, after adjusting for the wash sale.

[ADK44]

rjs,

Thank you for quick and easy to understand response. I've been thinking that I would be losing my whole $10,000 loss and would have someone knocking on my door telling me I'm off to the slammer.  Yes, I do have a Win column f, a $62 adjustment in column g, and a corresponding -10,286 in h on page two on my 8949.

Thanks.