Let's simplify the adjustment so that you are not taking a lot of time to identify the sales with the wash sale in it.
It's clear you know the rules so my advice is to put in a sale with only a sales price at the same amount as the wash sale loss. This will cancel out the wash sale loss for now and you can track it easily for 2024 when the wash sale no longer exists. Simply add the loss it to your cost basis for the actual sale of the remaining shares. Some wash sale details below.
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:
- A wash sale occurs when an investor sells or trades a security at a loss, and within 30 days before or after, buys another one that is substantially similar.
- It also happens if the individual sells the security at a loss, and their spouse or a company they control buys a substantially similar security within 30 days.
- The wash-sale rule prevents taxpayers from deducting a capital loss on the sale against the capital gain.
Affect on Cost Basis:
- The loss that occurs on a wash sale is added to the cost basis of the shares purchased that created the wash sale.
- When all shares are sold and there is no repurchase, that increased cost basis will be used in full and used to determine gain or loss.
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. 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 as in your situation. 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.
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