Imported 1099-B from Brokage Acct - Rounding Error

[Woodman228]

To save time and effort, I imported the brokerage statement.   

There is a Rounding Error of all the totals and the amounts are not correct.

How do I fix this in Turbo Tax to get the correct amount?    I hope I DO NOT have to enter all these transactions - there are 125 transactions.....

Thank you

[JohnB5677]

You can clear everything out by selecting the trash can next to your brokers name.

Your brokerage statements should include a summary of your transactions, grouped by sales category, for example, "Box A short-term covered" or "Box D long-term covered." You'll enter the summary info instead of each individual transaction.

1. Open or continue your return (if it's not already open) and search inside TurboTax for the phrase stock sales.
2. Select the Jump to link in the search results.
3. Answer Yes to both Did you sell stocks, mutual funds, bonds, or other investments? and Did or will you receive a 1099-B form or brokerage statement for these sales?
   • If you land on Here are all your 1099-B sales, select Add sales from a different brokerage. Then answer Yes to Did or will you receive a 1099-B form or brokerage statement for these sales?
4. When asked how you want to enter your 1099-B, select I'll type it in myself.
5. Select or enter your brokerage on the next screen and continue.
6. On the following screen (Tell us about...), answer the questions until you reach the next screen. Select the second option, Let's enter a summary instead, and select Continue.
7. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue.

When you are done, you'll eventually come to the Here's a summary of your broker sales screen where you can edit, delete, or enter more sales.

You will have to mail a copy of your 1099-B to the IRS.  TurboTax will produce a Form 8453. You print the Form 8453 and attach the brokerage statement(s) to it. 

[Woodman228]

Ugh....sounds like Turbo needs to hire developers to fix this problem in rounding numbers.

What other option is available?    

Thank you

[JohnB5677]

Here is a second alternative.

The error message you are seeing on the wash sale entries is a result of automatic rounding.  If the wash sale adjustment is $0.49 or less, then it is automatically rounded to zero.  This type of rounding is allowed by the IRS. 

To enter a disallowed Wash sale:​​​​​​​

Income & Expenses

1. Scroll to Stocks, Mutual Funds, Bonds, Other
2. Answer Yes to Did you sell stocks, mutual funds, bonds, or other investments in 2020?
3. On the OK, what type of investments did you sell? screen, select Stock, Bonds, Mutual Funds. Then select Continue.
4. From here, you can import or manually enter your 1099-B.
5. Answer the questions about your sales. Choose to Enter sales one by one when asked.
6. On the Now, we'll enter one sale on your 1099-B screen, enter your info.
7. Check I have other boxes on my 1099-B to enter and enter the disallowed wash sale loss in box 1g.
8. Select Continue and answer any follow-up questions.

Note: You'll need TurboTax Premier, TurboTax Live Premier, or TurboTax Self-Employed, TurboTax Live Self-Employed, to add any 1099-B forms.

When you sell an investment that has lost money in a taxable account, you can get a tax benefit. The wash-sale rule keeps investors from selling at a loss, buying the same (or "substantially identical") investment back within a 31-day window, and claiming the tax benefit.

If you sell a stock at a loss and purchase it back within 31 days it will create a wash sale.  That loss then carries over to the new purchase and is added to the cost basis of the newly purchased stock.  

Your broker should keep track of this, and it should be reflected in the future cast basis for profit/loss purposes

[bredman · Accepted solution]

As of 3/2/2021 in TurboTax Premier I see the correct amounts to the cents in the lowest level detailed entries imported from my brokerage firm compared with those in the corresponding written Form 8949. However, I have seen several rounding errors (rounding down when it should be rounded up and vice versa) in the next level up in TurboTax. This has caused nearly a $5 discrepancy in the summary values reported in TurboTax versus the summary values reported on the written 1099-B for my account.

Intuit needs to fix this issue in TurboTax immediately. Responses directing one on how to clear out all the entries and enter the information manually are not at all helpful when one has hundreds of transactions to report. I paid about $90 for TurboTax Premier so that the software would handle the data import and calculations correctly, especially since TurboTax advertises its "100% Accurate Calculations Guarantee."

[Woodman228]

I agree!!

[Woodman228]

This is NOT a wash sale.    All the transactions are present but the round error caused the problem to $$$$ off on the totals.

Any other ideas on how to fix this?    

[WendyN2]

I do have a suggestion, but first my advice would be to take a look at the amount of the discrepancy and see if it is making any difference on your "bottom line" - meaning your actual tax due. So, if it is increasing your taxable income or decreasing your taxable income (as I am reading this to be the case) enough to actually put you into a different tax bracket (higher or lower) than you should be if this rounding issue were not present, then you will want to manually adjust the amounts so that you are not experiencing this rounding issue. There are other "tricks" to this so-called trade that you could also try - tricks to the system in order to calculate your taxable income so that it is not affecting your tax bracket - but those are merely tricks and not advisable. 

Having said all of that, it is highly unlikely that the difference due to rounding is affecting your actual tax bracket and thus tax refund or tax due amount. If it is, it cannot be by all that much as TurboTax can only handle up to 500 imported transactions and if at the very worst all 500 transactions were rounding up or down all in the same direction, $500 barely - and I mean barely - has an effect on your bottom line due to the actual calculation of coming to the effective tax rate. I know this is not a "perfect" solution, but until brokerage firms and tax preparation software companies fall in line with using the same type of software, this will continue to be an ongoing issue (unfortunately).

[Woodman228]

I file electronically.....not by snail mail......Turbo Tax or Intuit needs developers to update their program!!

[Woodman228]

Wendy, you are correct it will not affect my bottom line   

The Proceeds are off by -2.00, Cost by +6.00 and Gain by - 8.00.   

Will this cause the IRS to send a letter these amounts do not equal?    

Thank you

[WendyN2 · Accepted solution]

No, not at all!!  Now, if it were to change by thousands of dollars in your favor, then yes the IRS would come a calling. What they receive electronically will approximate what you received - they will then check to make sure that your tax due/refund is not affected. Again, more so tax due, of course!! The IRS's software does the rounding in the accurate direction so it will still be off by those minimal dollars, but again, they don't audit or send out letters unless there is tax due or additional refundable. I am glad this helped!

[bredman]

@WendyN2 Not true! Last year I had a Turbotax error of less than $3 in the reporting of a foreign investment transaction on an investment reported on a 1099-B imported by Turbotax from my brokerage. I had not detected this error before filing my taxes, but the IRS sent me a letter about 6 months after I had filed my taxes about this error with their computed correction, a penalty, and fee. Including the registered mail postage to send my payment with their form to the IRS, my total cost was about $15 due to this $3 error, not to mention the cost of my time and aggravation.

[capshroud]

@WendyN2 This sounds like you're justifying a policy change rather than a bug that's being worked on (as I see it). If this is a policy change, there  must have been a reason. This is very disappointing and will begin a search for an alternative to TT.

[JoshB1]

Pretty ridiculous that all of these threads are marked solved because the support team wants suggests you manually re-enter all transactions to workaround a bug in their software