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1099-B wash sale adjustment is applied twice

I'm using Turbotax Deluxe on my computer, and I have a problem with one of my 1099-B's. I uploaded the 1099-B directly from E*Trade, and includes 1327 sales. The wash sale loss disallowed on the 1099-B is $9491.27, including short-term and long-term wash sale losses. But the adjustment listed on the "Your Investment Sales Summary" page is $18,982.54. This number is exactly double the amount reported on my 1099-B, quite a coincidence! (To get to the "Your Investment Sales Summary" page I click Federal Taxes > Wages & Income, then scroll down to the Investment Income section, and click Update in the right-hand column.)


To put this in perspective, my total losses for this 1099-B were $9264.79 and my disallowed wash sale losses were $9491.27 so my net income from sale of stock was under $1k, but Turbotax is applying double the correct adjustment, reporting income of over $9k for this 1099-B.


I read the instructions for entering the aggregate numbers from the 1099-B manually, and I know it would fix my problem, but I need to report all 1327 sales individually, because 29 of these sales were missing the cost basis. I need to correct this cost basis to avoid paying tax on the entire sale amount.


Any help would be appreciated. Thanks.

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3 Replies

1099-B wash sale adjustment is applied twice

GraemeMcRae,

 

As you state you are using a Desktop version of TurboTax, switch to the Forms view and look at the entries in Form 8949 to see if there are duplicated transaction perhaps from an inadvertent second import.  If so, you can delete them or, as there may well be many, try deleting the form and reimport to see if that fixes the problem.  Good Luck!

1099-B wash sale adjustment is applied twice

Thanks so much for your help. Since I posted my question, I have learned more, so if you're interested (And I hope you are!) here are the details.

 

First, yes, I tried deleting and re-importing the data, but it is still showing exactly double the correct adjustment. The problem seems to be related to a problem experienced by many others who have downloaded data from E*Trade after the conversion to Morgan Stanley. Each of the thousands of sales in the detailed data has an adjustment code of "N", which apparently is not a valid adjustment code. And, in particular, it is not the adjustment code that should be used for disallowed wash sales. So the disallowed wash sales come from the summary totals in the 1099-B form, and the adjustments with the invalid "N" code (which include all the wash sale adjustments) are being added up and included in the total adjustment. This is how the adjustment is getting doubled. It all boils down to a crapload of detailed data records with incorrect adjustment codes. It really looks like a data problem from ETrade / Morgan Stanley.

 

Thanks for reading this to the bitter end!

RachelW33
Employee Tax Expert

1099-B wash sale adjustment is applied twice

The issue with 1099-B's incorrectly importing with adjustment code N has now been resolved.  Please delete your imported 1099-B, update your software, and then re-import.

 

If this doesn't resolve the issue, please let us know so that we can assist you further.

 

  @GraemeMcRae  

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