topic Another wash sale question in Get your taxes done using TurboTax

Another wash sale question

stoikovmilen — Tue, 10 Feb 2026 11:27:08 GMT

Hello!

I bought 200 shares back in 2021 at cost basis of $2697.66. Then in December of 2023 the shares have dipped quite a bit but started to bounce back. I sold them all for proceeds of $751.98 while hoping to buy more back on the dip. I then purchased 210 shares(10 more than I had) of the same shares on the dip with the proceeds.

Now my 1099-b treats the transaction as a wash and it considering my loss of 2697.66-751.98=$1945.68 as a gain. Once the e*trade transaction was imported I had to pay capital gain stock on $1945.68, which appears onbox 1g - wash sale loss disallowed.. Why would I have to pay $400 in taxes if I lost $1945.68?

This is also the case on several other transactions and capital gain taxes add up to over $800.

Re: Another wash sale question

DianeW777 — Sat, 17 Feb 2024 17:32:35 GMT

Likely because you purchased the same stock back with in a 60 day window. Please see the wash sale rules below to see if your wash sale is still pending.

Wash sales cannot be combined into section totals. They should be entered individually so that you can track your cost basis and know when you are allowed to use the information on a final sale.

Wash Sale Rule Defined:

A wash sale occurs when an investor sells or trades a security at a loss, and within 30 days before or after, buys another one that is substantially similar.
It also happens if the individual sells the security at a loss, and their spouse or a company they control buys a substantially similar security within 30 days.
The wash-sale rule prevents taxpayers from deducting a capital loss on the sale against the capital gain of other stock.

Affect on Cost Basis:

The loss that occurs on a wash sale is added to the cost basis of the shares purchased that created the wash sale.
When all shares are sold and there is no repurchase, that increased cost basis will be used in full and used to determine gain or loss.

As long as you are tracking the wash sales and are not using them on the tax return when you are not allowed, then you can simply enter the same cost basis as the selling price. This will reconcile your tax return with your Form 1099-B Proceeds which is what the IRS is comparing.

Wash Sale ends:

The wash sale disallowed is not added to the net gain/loss rather it is adjusted and suspended so that it does not affect the total gain or loss for any pending wash sales. The rub is that the broker only knows when a wash sale occurs, not when a wash sale no longer exists. This can spill over between two tax years. Likewise you can have a wash sale during a tax year, and then fully dispose of the stock in the same year which would eliminate the wash sale rule for the final sale of the same stock.

It's up to you to know when you no longer have to consider the wash sale rule.

Example:

X bought 5 shares of ZZZ stock, at $5 per share, then sold it for $3 per share, however immediately before the original 3 shares were sold, X bought another 5 shares at $5.00 per share.

$25 for the first block of shares

15 is the proceeds creating a $10 loss

The $10 loss is now added to the cost of the new shares for an overall cost basis of $35.

Once the second block of shares is sold (5 shares with cost basis of $30) without any repurchase with in the 60 day window (30 days before or 30 days after the sale), and if they are sold at a loss, then no wash sale exists on the sale, and a loss is allowed.

Re: Another wash sale question

Spino — Sat, 17 Feb 2024 17:37:43 GMT

Wash sales are one of the harder things for reporting. In this case, you are saying that your 1099-B is wrong. That is certainly possible. You have the records and we don't, so let's just assume you're right....

You have two options. First, you can try to get your broker to issue a corrected 1099-B. Sometimes the errors are systemic and they do that without asking once they find the problem. Sometimes you will have no luck at all.

You can still report the correct information. However, you will want to carefully document what is wrong and what is right (instead.) Note that in the TT interview there is a specific question asking if any of the information on your 1099-B is wrong.

The other possibility, of course, is that you actually had a wash sale and your brokerage correctly reported that.

From google: "The wash sale rule prohibits taxpayers from claiming a loss on the sale or other disposition of a stock or securities if, within the 61-day period that begins 30 days before the sale (generally, the trade date) or other disposition, they: Acquire the same or “substantially identical” stock or securities;..." sourced from https://privatebank.jpmorgan.com/nam/en/insights/wealth-planning/for-your-year-end-tax-planning-beware-the-wash-sale-rule. So basically if you sell stock (etc.) at a loss and rebuy it within 30 days before or after, your loss is deferred until you sell the subsequent purchase. You didn't lose the loss because it gets transferred to the new position, but you don't claim it on the sale in question. It's called a "wash" because you don't get a gain or a loss on that first sale, i.e., it all comes out "in the wash ;-)".

Re: Another wash sale question

stoikovmilen — Sat, 17 Feb 2024 17:45:39 GMT

Yes, a wash by definition would be a great outcome for me as I am not trying to report a loss. I just dont understand why I am paying a gain tax of $400 on a loss of $1945

Re: Another wash sale question

Mike9241 — Sat, 17 Feb 2024 18:37:36 GMT

when you have a wash sale the loss is disallowed (IRC 1091) and it is added to the tax basis of the substantially identical securities (SIS) that created the wash sale (exception: no adjustment if the SII are purchased in an IRA). Otherwise selling the SIS and not purchasing SIS in the 60 day window results in recognition of that disallowed loss.

Re: Another wash sale question

stoikovmilen — Sat, 17 Feb 2024 19:06:11 GMT

Apologies, but not sure how that translates to my case. Most of the responses quoted the rules without specifying how they apply to my case, while was hoping if someone can confirm that I should be paying gain tax on a wash sale with a loss and if not, how it needs to look on the TurboTax?

Re: Another wash sale question

fanfare — Sat, 17 Feb 2024 19:46:28 GMT

"I had to pay capital gain stock on $1945.68, which appears onbox 1g - wash sale loss disallowed."

@stoikovmilen

a wash sale has a loss , not a gain.

you don't pay capital gain on col (g)

you deduct loss on proceeds - cost ( adjusted by Col (g) which is positive )

Your wash sale is triggered by buying certain shares.

You can recover a deduction for that disallowed loss when you dispose of exactly those triggering shares.

When the shares are disposed will depend on the ordering rules (LIFO, FIFO, etc) you setup with your broker.

The broker is required by IRS to track this all for you.

Re: Another wash sale question

fanfare — Sat, 17 Feb 2024 20:01:42 GMT

are you still holding the 210 shares you bought back waiting for them to go up?

If so, that's why.

@stoikovmilen

Re: Another wash sale question

dmertz — Sat, 17 Feb 2024 20:26:01 GMT

The amount of the disallowed loss became part of the cost basis of the repurchased shares. That increase in the cost basis of the repurchased shares above the repurchase price will reduce the taxable amount when you sell the shares.

For example if you sold XYZ at a loss and you repurchased XYZ at the same price within 30 days of the sale, you would not be able to claim the loss but also your cost basis would remain unchanged, as if you never sold the shares.

Re: Another wash sale question

stoikovmilen — Sat, 17 Feb 2024 21:11:07 GMT

Yes, I kept the 210 shares. So are you saying that I need to pay $400 gain tax on my loss, and whenever I sell the 210 shares, I will get it back the $400 tax, if I sell them for the purchased price of $2700? Hence, then it will be a wash?

Re: Another wash sale question

Spino — Sat, 17 Feb 2024 21:26:07 GMT

No, you don't have a gain on your loss. You just carry over the loss until when you sell (and don't rebuy within the 61 day window--30 before and 30 after.) A lot of the other things people are mentioning apply to wash sales in different circumstances, but not necessarily to your situation.

It sounds like you still have questions though about the taxes on your investments. The best way to get those answered might be to print out your 1099-B (or 1099 combined) and also your statements for the year and go over them with someone who "gets it."

Alternatively, you could call up customer service or your representative (if you have one) at your financial services company and they might answer your questions. Sometimes, though, they say something along the lines of, "ask your tax adviser."

Re: Another wash sale question

rf_ee — Sat, 31 Aug 2024 02:18:20 GMT

Did you find an answer to your question? I had a similar problem and the brokerage (Etrade) sent me a corrected 1099B in June. I entered the correct numbers from that 1099B by hand and it solved the problem

Re: Another wash sale question

alshi — Wed, 13 Nov 2024 04:18:38 GMT

Can I sell the SIS with the high adjusted cost base in the same year?
In other words

For example,
(1) I sell stock A for a $100 loss. (I held A for years)
(2) A week after, I vest more RSUs of A and (3) immediately sell at the same price I bought it. Because of the adjusted cost base, the second sale has an adjusted loss of $100.
(4) Then I sell an unrelated stock 'B' at a gain of $100.
Overall the net gain/loss is $0.

Can all this happen in the same year?

Re: Another wash sale question

fanfare — Wed, 13 Nov 2024 07:11:30 GMT

Yes.

assuming the number of shares involved of A are the same, sale of the triggering stock A in your example brings the deferred loss to the fore.

However, this does not absolve you of your obligation to include details of "wash sales" on Form 8949.

@alshi

Re: Another wash sale question

alshi — Wed, 13 Nov 2024 18:29:43 GMT

Why does the number of stocks matter?

Re: Another wash sale question

Spino — Wed, 13 Nov 2024 21:39:10 GMT

Let's suppose that SIS means "stock incentive share [plan]" and RSUs are Restricted Stock Units. [Am I right? I actually don't know for sure. https://www.lawinsider.com/dictionary/sis-plan This means you probably work for company A.]

1) Unfortunately your old shares are now selling at a loss. You sell some [say 10 shares] and recognize a loss of $10 per share for a total of $100 capital loss on the sale.

2) Your company's SIS plan kicks in and you have set your newly vested [10] shares to immediately sell. They do and you would normally have a gain of 0, but...

3) The wash sale rule kicks in since you "bought" [vested RSUs] matching positions of the stock shares you sold at a loss within the window [30 days before and 30 days after the sale at a loss.] This means these new shares get the carryover from the previous loss. https://www.investopedia.com/terms/w/washsale.asp

a) You no longer show the capital loss on your sale in 1. You now report no loss on that sale for tax purposes. This was the "wash sale."

b) The new [10] shares gets a matching markup in cost representing this undeclared loss of $10 per share on the matching number of [substantially equivalent] shares. "Also, the holding period of the wash sale securities is added to the holding period of the repurchased securities, which increases an investor’s odds of qualifying for the 15% favorable tax rate on long-term capital gains."

c) These shares sell immediately as intended and you again have a [new] loss of $10 per share. You will declare THIS loss on your taxes unless...

d) The same thing happens again a month later, in which case you have to do it all again!

e) The unrelated sale of stock B is unaffected. You report it normally. The wash rules only apply to matching

4) Moral of the story:

a) This is only a problem with losses. Gains do not trigger "wash sale" rules. So you only have to watch out for it when you are selling shares at a loss in stocks that you are also buying within the window.

b) If a brokerage was reporting both the sales and the purchases for you in the same account, they would hopefully keep track of this, but the brokerage can't know about what happened somewhere else, so you have to keep track of it when it happens in different places. SIS RSUs are a classic example of when the brokerage won't keep track.

c) The wash rule applies even when the sales and purchases happen in different beneficial accounts for the same investor, like your Roth IRA and your taxable brokerage account.

d) While it sounds burdensome, you're not going to have a problem in the long run unless you actually try to use this to avoid paying taxes, which is why the rule was put in place. [I.e., the IRS generally only wants to penalize you if you avoid taxes you should pay, not just because you filled out the forms wrong.]

e) You are going to want to keep the records in a spreadsheet or reconstruct them at tax time, because of the potential to lose track of your proper basis when wash sales are an issue. Of course if you don't do spreadsheets, keeping paper logs of sales and purchases would be a nice thing to hand to your tax preparer, even if that's you as well.

Re: Another wash sale question

Spino — Wed, 13 Nov 2024 21:43:01 GMT

Hopefully my longer reply helps you, but it matters because you are "matching" positions sold and repurchased within the was sale window. So it's 10 for 10, etc. You could have 10 bought to match and 90 more with no match or 100 sold but only 10 of them rebought, in which case only those 10 would have the loss deferred using the wash sale rules while the 90 would have the loss.

As always, if this still doesn't make sense, a face to face conversation with someone who knows is probably worth having.

Re: Another wash sale question

alshi — Wed, 13 Nov 2024 23:33:45 GMT

Thanks a lot for the explanation. This is really helpful!

I hopped on a call with eTrade today, and they said that they indeed track wash sales and indicate them in the user portal, but this case of vested RSUs wouldn't "count as a purchase" so it doesn't trigger a wash sale. An ESPP purchase would since that's in my control. I couldn't believe it since it doesn't match what I've read online, but 3 different people there told me the same.

Re: Another wash sale question

Spino — Fri, 15 Nov 2024 14:05:32 GMT

I don't think it's a big deal, for reasons I outlined in this thread, but remember that ETrade and any other broker will always issue the disclaimer that they do not offer specific tax advice. Same is true here, of course. I think their logic might be that since the RSU was already taxed at the highest income tax rate when it was issued (as a form of earned income/"wages"), there is no way that buying it avoids tax on an unrelated sale. For your own records, you might document your call in a dated note or email to yourself noting what they told you.