@rf_ee - I suspect you are overthinking it. If you just ensure that Turbo Tax MATCHES the 1099-B from the broker it will all work out.
And you may have done something wrong in Turbo Tax if you played with the wash sales; how was there a gain?????? can you provide the specific numbers?
it's just the loss that is disallowed, but it should not cause a loss to become a gain. Please review how the 1099-B is reported and what you reported to the IRS in Turbo Tax. You may be misinterpreting what occurred.
Let me provide an example as a way of explaining.
- On June 10, 2023, you purchased 100 shares of ABC stock for $10 per share. (cost basis $1000)
- On August 10, 2023, you purchased an addition 100 shares of ABC stock for $5 per share. (cost basis $500)
- On August 15, 2023, you sold 40 shares at $4 per share. (sales price $160, cost basis $400 from the June 10 lot). There is a 'wash sale since you sold at a loss and purchased the same stock within 30 days on either side of the loss sale. No gain and no loss is able to be reported on the tax return. The loss is added to the cost basis of an existing lot.
your current cost basis would be:
- The June 10, 2023 has the 60 remaining shares at a cost basis of the original $10 per share or $600 PLUS the disallowed wash sale of $240, so $840 in total).
- The August 10, 2023 lot still has 100 shares with a cost basis of $500)
On August 16, you sell out the entire position at $3 per share and do not buy the stock back again any earlier than September 17!
Sold 160 shares at $3 per share. $480
Cost basis: $840+500 or $1340
Loss reported on tax return: $860
So let's reconcile that:
- there were two purchases totaling $1500
- there were two sales ($160 + $480) totaling $640
- total loss of investments: $860!!!!! it matches the loss reported on the tax return.
does that make sense. Again, it's not as complicated as I think you are suggesting. Your strategy should be to ensure that what is in Turbo Tax matches what is on the 1099-B. The strategy is as simple as that!
