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 wash sale losses that were disallowed cannot be used to offset long term gains on the stock you sell in 2023.
But any capital losses (not wash sales) that exceeded $3,000 can be carried over into the next year (2023 in your case). Before they can be carried over, however, the capital losses must first be used to offset any capital gains from the current year.
Follow these instructions to ensure TurboTax reports the wash sales on Form 8949:
- Open or continue your return in TurboTax and search for wash sales
- Select the Jump to link at the top of the search results
- Answer Yes to Did you have investment income in 2022?
- If you land on Your investment sales summary, select Add more sales
- On the OK, let's start with one investment type screen, select Stock, Bonds, Mutual Funds. Then select Continue
- From here, you can import or manually enter your 1099-B
- Answer the questions about your sales. Choose to enter sales One by one when asked
- On the Now, enter one sale on your 1099-B screen, enter your info. Check I have other boxes on my 1099-B to enter and enter the disallowed wash sale loss in box 1g
- Select Continue and answer any follow-up questions
If you are using TurboTax CD/Download, follow these steps: TurboTax CD/Download
