My Form 1099-B shows wash sale loss even though I sold ALL the shares

Forum|Forum|3 years ago
February 23, 2023
1 reply
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My mutual fund paid a dividend and a long-term gain on 12/16/22 which I reinvested. On 12/29 I sold ALL of my shares of that fund at a loss. My 1099 is reducing my loss due to a wash sale. Is that correct, considering that I sold ALL of my shares? If I had retained some shares or bought some new ones in the 30 days after the sale, I understand that the amount of the reduction would be added to the basis of those shares so I wouldn't lose the benefit of the loss completely. It seems to me that if I sold all the shares there should not be a reduction for a wash sale. Please advise. Thank you.

GeorgeM777

Level 11

The wash sale period includes not only the period 30 days after the sale but also 30 days before the sale date. Thus, the wash sale rule includes a 61 day period. From you post, it does not appear that your entire loss was disallowed, just some portion of it. Without knowing your full transaction history for the period at issue, it could be that the reinvested shares triggered the wash sale rule because reinvested shares represent a purchase.

@bbjaspan

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bbjaspanAuthor

Level 5

Thank you for your reply. Yes, the reinvested shares would definitely trigger a wash sale and the amount of the unallowed loss would be added to the basis of those shares. But I sold those shares along with all other shares I held in that fund so I believe the net result should be no "penalty" at all. Am I missing something?

rjs

Level 15

You haven't said whether the disallowed wash sale loss was added to the basis of the shares purchased by the reinvestment. Does the 1099-B report the sale of the shares purchased on 12/16/22 separately from the sale of the older shares? If it reports all of the shares lumped together in a single sale, it might be hard to figure out how the basis was calculated. It's even harder if you had many small purchases from reinvestments over the years, and if the fund used average basis. You could ask the mutual fund company whether the reported basis was adjusted for the disallowed wash sale loss.