Where do I enter Wash Sale Loss Disallowed when manually entering sales section totals from my 1099-B?

[thaiken22]

Everyone see here for how to enter your wash sales!! 

[vincus007]

My 1099-B form broker has summary of "proceeds" and Cost basis". there is another column for Wash sale Loss Disallowed.  To make it simple, lets say my summary show:

proceeds is  10,000

cost basis is 7,000 

wash sale is 2,000.  
realized gain is  5,000

(In other words, i have to subtract the 2k from the 7k cost basis because its disallowed, therefore making my cost basis is only 5k and making my realized gain 5k.)

I have closed all positions prior to year end. So shouldn't my realized gain be 3k instead of 5k?  I should be able to use the entire 7k cost basis which already includes the wash sale cost basis because I closed all my positions and didn't purchase anymore, right? 

So how do i enter that in turbo tax? If I allow turbo tax to import it via online, it does, but it shows a realized gain of 5k.  I need it to show a realized gain of 3k because i am supposed to be able to use the entire cost basis since i closed out all my positions before year end last year. So how do I do this on turbo tax?

If i try to enter it via summary, It asks for the total proceeds and total cost basis. If i enter just those 2 information then I'm fine, it will show a gain of 3k. But my  1099B shows a gain of 5k  (due to the wash sale).

So how do i reconcile this? If i use the box "i need to adjust my total cost basis" and check box "W" (non deductible loss from a wash sale), then it will increase my gain back to 5k. 

Bottom line:  How do input the proceeds, cost basis and wash sale, but also indicate that all positions are closed therefore the gain should be 3k instead of 5k . 

[GeorgeM777]

It is not entirely clear from your question why the wash sale rule is implicated given that you seem to have realized gains. 

The wash sale rule essentially disallows the taxpayer from taking a loss on the sale of a security.  For example, if you sold a security at a loss, and within 30 days purchased the same or similar security, then the loss you realized on the sale would be disallowed, and that disallowed loss would be added to the cost basis of the purchase that triggered the wash sale, thus increasing your cost basis.   If you were to sell the security you purchased (that is the purchase that triggered the wash sale) at a gain, then the wash sale rule is not applicable because you sold at a gain. 

@vincus007

[elvodaoz]

Wash-sale is a touchy subject. When comes to reporting wash-sales to IRS its a law and it does NOT help you with gains, you CAN NOT use it against your gains. So why do we have to report it? Well I guess IRS wants to know if you caused any wash-sales. But, please anyone correct me if I'm wrong, I read and heard that we can include wash-sale losses(amount) one year after reporting it to IRS.  For example: I reported  $32,000 in wash-sales last year for year of 2020 to IRS, so this year I can report that $32,000 in wash-sale against my last years gain(s) for year of 2021... AGAIN correct me if I'm wrong about this finding, I'm still looking into this.

[DawnC]

No, you can't use last year's wash sales on this year's return.   Or this year's on next year's return.   The wash sale rule is below:  

The wash sale rule prevents you from deducting losses when you buy replacement stocks or securities (including contracts or options) within a 30-day period either before or after you sold substantially identical securities.

The rule doesn't apply if you're a securities dealer and the trade was part of your business activity.

The tax or cost basis of the replacement securities is the new cost increased by the disallowed loss.  This applies even if you buy the replacement stock in a different account.  Buying the replacement stock in an IRA can be especially painful since cost basis isn't typically recognized in these accounts.  Therefore, the loss on the sale would be lost.

Tip: If you purchased and sold stock at a loss within 30 days, but didn't purchase or acquire substantially identical stock or securities, you have a short-term capital loss instead of a wash sale.   

Net losses are deductible, but only up to a maximum of $3,000 ($1,500 if married filing separately). Any capital losses you couldn't deduct this year can be carried forward and deducted on future tax returns. This is called a capital loss carryover.

There are different strategies for avoiding wash sales out there.  If you own an individual stock that experienced a loss, you can avoid a wash sale by making an additional purchase of the stock and then waiting 31 days to sell those shares that have a loss.   In this same situation, an investor may decide to liquidate the holding, recognize the loss, and then immediately buy a similar investment that will also satisfy their investment goals or portfolio allocation.   If the transaction meets the definition of wash sale it is disallowed.  

How do I enter a wash sale on my 2021 return?

Here is the IRS Pub 550 on this topic.   @elvodaoz

[Anonymous]

Does one have to really mail the large statement of 500 pages to IRS since Turbotax cannot handle so many transactions? After entering summary details for 1099-B transactions, do I need to print and mail the thick paper document statement of 1099-B?

[amanmarwah]

HELLO ALL NEED HELP ASAP, 

I am looking at my etrade WASH SALE LOSS DISALLOWED section and it looks wrong.  For example I was buying and selling the same stock 40-50 times during the year, when I would take a wash sale loss disallowed it would not be added to the cost basis the next time I bought the stock like 40 days later, the cost basis showing on the 1099 is just the market price * shares + commission, I don't see for any of the buys I did all year where the wash share loss from prior sale was carried over to new purchase.  What should I do?

[gh151]

@vincus007 ,

Did you ever figure this question out? I am having the same problem and no one seems to be able to help me. I had a wash sale but I also sold all of the shares by December 31 2021. How can I cancel out the wash sale and show that when I file??

[RobertB4444]

@amanmarwah & @gh151  TurboTax has no way to determine what your wash sale loss should be.  If you have calculated what you believe it should be and it does not match the 1099-B that you received then you should contact your broker and ask them to explain their reasoning to you.  They can issue a corrected statement if they have made a mistake.  

[fanfare]

@gh151 

selling out your entire position does not expunge your wash sales from your record, nor relieve you of your reporting obligations.

IRS still requires you to itemize your wash sales.

You may think it silly, but that's how it is.

@amanmarwah 

  I answered this for you on your other thread.

[bbodenmiller]

Should wash sales (1g Wash Sale Loss Disallowed) be entered in Total adjustments to gain (or loss) box as a positive or negative number? 

[thaiken22]

Enter in positive

[RaifH]

If you are making an adjustment due to Wash Sale Losses Disallowed, enter the wash sales with Code W as a positive number.

Disallowing losses due to wash sales will increase your capital gains, therefore, enter it as a positive number. 

@bbodenmiller

[smithalx53]

I was on the phone with one of the TT pros for 55 minutes and they could not answer.  Any suggestions on where I can enter the costs/fees for  the expenses for the account?

[Mike9241]

the cost fees for your account are no longer deductible for federal purposes. you can enter them when you get to schedule A but the only purpose would be to get a deduction for state taxes if you have a state income tax that allows such deductions.

has your wash sale question been answered? when there is a wash sale the trade is supposed to be detailed even if entered on the 1099-B in the sections that say sales price and tax(cost) basis reported to IRS. the summary lines for entering these types of trades in Turbotax do not allow for reporting wash sales amounts.  

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