Disallowed Wash Sales and Filing with Two Different Brokerages

[PJhiker]

Hello, I have a few questions. I have uploaded two different brokerage 1099 forms to Turbo Tax. I have Disallowed Wash Sales on both, however because I sold all the securities relating to those in early November od 2022 I believe they are not factored into my Net Gain/Loss and so far Turbo Tax is reflecting that in the totals. However, I may also have Disallowed Wash Sales that cross over the two brokerages as well because I bought a security at a loss and repurchased it in the other brokerage. Again though all these securities have been sold in early November 2022. My question is do I need to concern myself with these possible crossover wash sales and does Turbo Tax catch these on the 8949 from that has all the transactions when the 1099 forms from the brokerages are uploaded? Also, are the deductions as it relates to any losses like the $3k amounts automatically accounted for when these brokerage 1099 forms are updated from the brokerages? Thank you

[fanfare]

strictly speaking, you have to report the details of wash sales across brokerage account from your own records.

since you closed everything out, the disallowed loss was realized.

the  net gain/loss from brokers is accurate.

there is nothing to do.

@PJhiker 

[fanfare]

" because I sold all the securities relating to those in early November od 2022 I believe they are not factored into my Net Gain/Loss"

they are factored in because you no longer hold any shares of that security as of year end.

again there is nothing to do.

@PJhiker 

[PJhiker]

Can you explain this a little further for me. So, I am right that Selling the securities in 2022 makes all disallowed wash sales realized and factored into my net gain/losses right? Do I have to do make those sales by a particular date? I have been told by the end of November so the 30 day period expires by the end of the calendar year? Also, so I am unclear on what you are saying in regards to the wash sales that may crossover the two brokerages. Are you saying I should go through all transactions to find those and report them? You said strictly speaking I should do that. Or, are you saying I am good to go and there is not need to do that? Will the IRS understand these crossover wash sales are realized and not need them reported as well?

[fanfare]

If you went and did something in January to cause a wash sale in 2022, issuance of 1099-B is delayed so your form can take note of that. that's why it takes so long to get your consolidated 1099-B,

OR a corrected 1099-B will be sent out later and you would have to amend.

IRS requires details of  transactions with adjustments to be supplied on some Form 8949,

Wash sales have an adjustment to disallow the loss.

"strictly speaking" means: since the wash sale details are not going to change the amount of your tax, why bother.

IRS only knows what you report. 

a wash sale triggered by a purchase in an IRA can only be reported by you. Otherwise it is never discovered.

[PJhiker]

OK, this makes sense. So it sounds like I don't need to bother going through transactions to report this right? Sorry, just trying to make sure.

[fanfare]

Use your own judgement and common sense.

[PJhiker]

Mine is not in an IRA so I think I won't worry about it. In case I do do, do you know where this would be reported on Turbo Tax manually by me?

[fanfare]

I already answered that.

IRS requires details of  transactions with adjustments to be reported on Form 8949,

Use the 1099-B panel to get to Form 8949, you cannot access that form directly.

@PJhiker 

[PJhiker]

Thank you for your help. Can you tell me if these adjustments in this case would be called "duplicate" wash sales? Also, where do I access the 1099 panel on Turbo Tax? I have tried to find it but can't.

[fanfare]

you have to find the sell with a loss from broker A and the triggering transaction from broker B  and adjust them and replace those transaction's details as imported by TurboTax.

This changes the subtotals on the Form 8949 and the subtotals on Schedule D (all recalculated for you by the program)  but in the end the gain/loss should show no change  else you made an error.

then repeat for any other wash sales due to multiple brokers.

Are you sure you want to go through with this?

your next question is going to be "how do I adjust for a disallowed loss?"

@PJhiker 

[PJhiker]

OK. I think see where to do the adjustments. When you ask me if I want to go through with this are you saying it is not necessary for me to do so? Are you saying the IRS won't require me to in my particular case? Or, are you saying I should get a professional to do it?

[fanfare]

If you had not liquidated all which closes the triggering transactions, these adjustments (that only you know about) would change your gain loss when the triggering transaction is still open and the loss is disallowed in tax year 2022. the triggering transaction would have to be adjusted manually when that lot is sold in a future tax year.

I think I'm going to stop now.

@PJhiker 

[fanfare]

"it is not necessary for me to do so?"

It is not necessary.

There, I said it, only so I can escape from this discussion.

@PJhiker 

[PJhiker]

LOL. I'm sorry. I'm obviously new to this aspect and just trying to make sure I understand it all 100%. I really do appreciate your help and patience with me. I am grateful.