If you have multiple broker accounts and you do a wash sale then you will need to make the adjustment manually.
also be aware that if you have retirement accounts, sell stock at loss in taxable account, the replace them within the wash sale period in a retirement account. that too, would result in a wash sale.
not only won't TT catch multiple account wash sales, I know of no software that can do this
Wow! This might become the first nightmare of my life. What is unbelievable is that there exists none such software! How about tradelog (https://www.tradelogsoftware.com/)? Can this help?
"What is unbelievable is that there exists none such software! How about tradelog (https://www.tradelogsoftware.com/)? Can this help?"
Apparently that software does exist. TradeLog says they can handle this situation perfectly; that seems to be their Raison d'être as they emphasize wash sales repeatedly throughout their site. They offer a free trial so perhaps you can test it out and report back.
To a large extent the "nightmare" aspect of wash sales depends heavily on your volume and pattern of trading. If you're day trading in more than one brokerage account and trading the same stocks across all the accounts then reconciling the activity can be difficult. But if you're talking about a handful of trades across accounts you should be easily able to handle that.
Thanks for answering TomYoung.
Do you know what is the right procedure in the turbotax to manually correct this? 8949 has many correction code available. How to correct the loss as wash loss and where to add this (potentially in other account trade activity) wash loss to the cost basis?
Basically how to do manual correction in the turbobax (using any correction code to tell IRS - this was reported in the 1099b and here is how I corrected it for your benefit (b/c I am deferring that loss)).
If you're reporting each trade, then any time you have a loss and it's a wash sale loss you make the correction with the associated 1099-B. You can make this sort of adjustment using either the interview process or if you're using a desktop version of TurboTax, directly on Form 8949. The interview process is probably the best way as direct entry on forms and schedules can sometimes prevent e-filing and/or void TT's Accuracy Guarantee.
After entering the 1099-B as it reads, click the "I'll enter additional info on my own" button. On the next page you can either put the wash sale loss disallowed in the "Wash sale loss disallowed" box or put the correct basis for the trade in the "Corrected cost basis" box. Either way, properly done, will get you to the correct gain or loss. Using the 1st box will put a "W" code on Form 8949 while using the 2nd box will put a "B" code on Form 8949. I wouldn't worry overmuch about the code used. If your income is properly stated on your income tax return the IRS can't really do anything to you over a matter of "style."
How is this adjustment made manually?
The 1099 was uploaded to TT. Do you adjust the values that came from the 1099? Would the IRS understand what the changes were for?