I am unable to import my Betterment 1099-B due to a large number of sales (over 4,000). When manually entering the 1099-B details, I chose "Enter sales section totals" because manually entering each individual sale is impractical.
For each sales section, I can enter the total proceeds (sum of all Box 1d) and total cost or other basis (sum of all Box 1e). However, I don't see any way to enter the Wash Sale Disallowed amount (sum of all Box 1g) for each sales section.
How do I enter the Wash Sale Disallowed amount for each sales section total?
The wash sales must be separated out from all other sales, then combined if you want to enter a summary total, or one transaction.
Maybe the following information will help you to see how to summarize your sales in TurboTax that are NOT wash sales to complete one entry for long term sales and one entry for short term sales.
In short, you will have three entries in your TurboTax return.
Wash sales cannot be combined into section totals. They should be entered individually so that you can track your cost basis and know when you are allowed to use the information on a final sale.
Wash Sale Rule Defined:
Affect on Cost Basis:
As long as you are tracking the wash sales and are not using them on the tax return when you are not allowed, then you can simply enter the same cost basis as the selling price. This will reconcile your tax return with your Form 1099-B Proceeds which is what the IRS is comparing.
Be sure to keep good records so that you know when to add those losses for future sales. To complete the tax return for the IRS, when summarized transactions are entered, follow the steps below.
If you are e-filing your tax return (recommended), then mail your statements along with Form 8453 to:
Internal Revenue Service
Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX 73344-0254
If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).
Thank you for your reply. Are you suggesting I enter all 4,000+ sales individually? That would be impractical, and I'm not certain TurboTax even supports that man transactions.
On my 1099-B, for each section total, there is a total for Proceeds (1d), Cost Basis (1e), and Wash Sale Loss Disallowed (1g). The net gain/loss is calculated by subtracting the cost basis from the proceeds. TurboTax allows me to enter the proceeds and cost basis and then calculates the net gain/loss. My concern is that there is no place to enter the Wash Sale Loss Disallowed amount. Shouldn't the Wash Sale Loss Disallowed amount be added to the net gain/loss?
No. The wash sale disallowed is not added to the net gain/loss rather it is adjusted and suspended so that it does not affect the total gain or loss for any pending wash sales. The rub is that the broker only knows when a wash sale occurs, not when a wash sale no longer exists. This can spill over between two tax years. Likewise you can have a wash sale during a tax year, and then fully dispose of the stock in the same year which would eliminate the wash sale rule for the final sale of the same stock.
It's up to you to know when you no longer have to consider the wash sale rule.
Example:
X bought 5 shares of ZZZ stock, at $5 per share, then sold it for $3 per share, however immediately before the original 3 shares were sold, X bought another 5 shares at $5.00 per share.
$25 for the first block of shares
15 is the proceeds creating a $5 loss
The $5 loss is now added to the cost of the new shares for an overall cost basis of $30.
Once the second block of shares is sold (5 shares with cost basis of $30) without any repurchase with in the 60 day window (30 days before or 30 days after the sale), and if they are sold at a loss, then no wash sale exists on the sale, and a loss is allowed.
You do not have to enter 4000 transactions, you can combine the wash sales into one entry, once you decide the transactions that are still open. Then include your statement with the detail.
[Edited: 03/09/2021 | 10:58a PST]
So, back to my original question. Where do I enter the Wash Sale Disallowed amount from 1099-B box 1g?
I cannot import the 1099-B, nor can I enter the transactions individually because there are over 4,000 transactions which TurboTax does not support. My only option appears to be to use the Section Totals, but I cannot find a place to enter the Wash Sale Disallowed amount.
The wash sales must be separated out from all other sales, then combined if you want to enter a summary total, or one transaction.
Maybe the following information will help you to see how to summarize your sales in TurboTax that are NOT wash sales to complete one entry for long term sales and one entry for short term sales.
In short, you will have three entries in your TurboTax return.
Bro, I got the same problem. Took me 1 hour to go through with the support to figure out. After you end the proceed and cost basis, you should see the check box below "I need to adjust my total cost basis".
Fill in your wash sales at "I need to adjust my total cost basis", select the W (nondeductible loss from a wash sale) check box, that is how you enter your wash sales.
Good luck!
Did you add wash sales to the Gain/Amount Loss or is that automatically figured in?
This is where I am getting tripped up because one Turbo Tax expert told me to add, another one said it was automatically done.
the gain loss will auto calculated. You should see the gain loss amount smae as your 1099 doc
When you type in amount for Proceeds then amount for Cost Basis, look down next line under, there should be check box to click on. Check box will say something like Adjusted Cost Basis, click on it, scroll down to where it says something like W(wash sale loss not allowed) can't remember exactly what it said. Don't forget to type in in the bar the wash sale disallowed amount, then click done, that should calculate it.
Hi,
If i choose cost basis adjustments and enter wash sale disallowed amount. my profit amount increases and does not match with 1099b given by fidelity. Can you help me what amount need to be entered in cost basis and proceeds ?
-Pratima
It should be very simple, but looks like you need to learn how to read you'r Fidelity's Tax Document.
Look for something that says Summery, its usually on one of the first 3 pages on your Fidelity's Tax Document.
Then look at what type of trades you made, whether its short term or long term trades. Then look at the numbers, usually above first number will say Proceeds(that indicates that anything under that word is Proceeds) , above the second number will say Cost Basis(that indicates that anything under that word is Cost Basis), above 3rd number will say Wash Sale Loss Disallowed(you getting the point?) and above 4th number will say Total Gain/Loss(get it?). So, all number needs to be entered to be calculated except 4th(which is you'r Total Gain/Loss don't have to be entered) number . You type in Proceeds amount in the first bar, then Cost Basis in second bar, then and this is very important, look at next line under, there is a box, it says something like Adjusted Cost Basis, click on it. More options will pop up, in the bar that says usually 0.00, type in your Wash Sale Loss Disallowed amount. After that, scroll down and click or check mark one of the boxes, its usually the box that says something like: W(wash sale loss not allowed). Then press done. If that don't work for you than you need someone who is pro. at doing taxes, to look at your tax documents, there could be issues. Good Luck.
Hello,
My tax return is accepted but I didn't include wash sale from 1099b.
How to fix this problem?
Thank you
What a simple straightforward answer. I wonder why all the experts couldn't answer it? Thank you.
I saw where to enter it but couldn't find the code to use. Appreciate your help.
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 .
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.
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.
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
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?
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?
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??
@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.
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.
I answered this for you on your other thread.