Wash sale - Dissallowed loss reported higher than adjustment

Forum|Forum|3 years ago
December 21, 2022
14 replies
112 views

Hi,

I have the following scenario

3/8 - Bought 3 shares of MSFT - Adjustment to cost basis - 136$

3/25 - Sold 15 shares of MSFT. Wash sale dissallowed loss - 476$

3/30 - Bought 4 shares of MSFT - Adjustment to cost basis - 95$

Fidelity right reported 3/25 as a wash sale. The triggering transactions were the buys on 3/8 and 3/30. However, there is a discrepancy in the wash sale dissallowed loss and the adjustment made the cost basis for the triggering transaction. They do not add up. I believe this is because of the discrepancy in the shares sold and bought.

Should I update the dissallowed loss while reporting my taxes to match the adjustment that Fidelity made to the cost basis for the buy transactions?

Thanks,

TurboTax Premier Online

Mike9241

Level 15

talk to fidelity for an explanation. they have info you have not provided. . one is the fact you sold 8 more shares than what you show you owned.

example

3/8 bought 3 at $120 =$360

3/30 bought 4 at $100 = $400

3/25 sold 3 at $75 loss on 3/8 purchase $45*3 = $135

3/25 sold 4 at $75 loss on 3/30 purchase $25*4 =$100

where the other 8 shares are we don't know. only Fidelity can tell you what happened.

however, purchases would include any shares acquired by dividend reinvestment during the wash sale period which would be 2/23/2022 through 4/24/2022

Mike9241

sourabhguhaAuthor

Level 2

No text available

dmertz

Level 15

What cost-basis method is being used on your brokerage account?

The share price of MSFT on 3/25/2022 was between $299.29 and $305.50. A loss on that sale of $31.73 per share seems to imply that most of the shares that were sold were purchased near MSFT's all time high in late 2021 or early 2022.

fanfare

Level 15

"Should I update the dissallowed loss while reporting my taxes"

I recommend you report exactly the SELL transactions shown on your 1099-B supplied to you in February,

copy of which goes to the IRS.

Transactions with adjustments i.e. wash sales, have to be itemized on Form 8949, or equivalent.

@sourabhguha

sourabhguhaAuthor

Level 2

@fanfare - If I report the disallowed loss as is, then wouldn’t I be reporting a greater gain. Essentially, I sold more stocks than the number that was bought.