topic Re: PA schedule D in State tax filing

PA schedule D

woodwardtodd71 — Tue, 23 Mar 2021 20:38:18 GMT

Turbo-tax imported my 1099-B from TD Ameritrade. Which I showed a $11,000 plus gain on my Federal return, but my PA return shows a $9000 plus loss. I think it has something to do with the wash sale.

Re: PA schedule D

SundayInSalem — Wed, 24 Mar 2021 03:50:18 GMT

Pennsylvania does not follow federal wash sales rules. It considers every transaction "separate and independent of any subsequent transaction."

See Wash Sales in Net Gains (Losses) from the Sale, Exchange, or Disposition of Property

Re: PA schedule D

woodwardtodd71 — Wed, 24 Mar 2021 17:37:57 GMT

Turbo-Tax transferred all the info from my Fed tax to my PA tax, so I assume this is what I go off of? Any thoughts

Re: PA schedule D

SundayInSalem — Wed, 24 Mar 2021 21:55:48 GMT

My experience is that TurboTax correctly removes any wash sales when it transfers information from federal to Pennsylvania.

You can add up your total capital gains without the wash sales listed on Form 1099-B and check. PA does treats all capital gains the same. There is no long or short term transactions.

Re: PA schedule D

woodwardtodd71 — Wed, 24 Mar 2021 22:50:13 GMT

With no wash sale I would report a capital gain, but because of the wash sale my PA taxes show a loss. Can this be correct?

Re: PA schedule D

Alv545 — Wed, 31 Mar 2021 19:28:18 GMT

I am basically having the same problem my broker p/l and federal return is showing a 2.2k loss but when transferring to pa I am showing a 10k loss. Which is from a 7.5 wash sale? Does anyone know if I actually lost that much or what is going on? I know it is from the wash sale...

Re: PA schedule D

DianeW777 — Thu, 01 Apr 2021 14:00:52 GMT

Pennsylvania (PA) does not follow the federal rule for wash sales. Each year all sales of investments are combined for the overall gain or loss (netted) for PA purposes. There is no tracking of wash sales for your PA state return. PA does not allow any loss from one category of income to offset another category of income.

Wash Sales

The federal wash sale provisions do not apply for Pennsylvania personal income tax purposes. For Pennsylvania purposes, every transaction is considered separate and independent of any subsequent transaction.

That being said, only you will know the extent of your wash sale losses in total and if each one applies at year end. I'm not convinced the broker knows when it is no longer wash sale. Below you will find a summary of the wash sale rules as they pertain to your federal return.

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.

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.

Be sure to keep good records so that you know when to add those losses for future sales.

Re: PA schedule D

fjsingel — Sat, 07 Aug 2021 12:01:15 GMT

Well, I am looking that this now. When I do my import from fidelity, it pushes the disallowed basis from wash sale to the second transaction. Problem is, when Turbotax pulls the return into the state, the transaction that Fidelity changed the basis on is NOT flagged to be modified in the state return. It looks like what I have to do is modify the sale that was flagged to wash sale to compensate. This means that individual sale will not match my records, but overall the gain for the security, for the year, it will all add up to be correct.

BTW, what a pain.

Re: PA schedule D

Conrail_G — Thu, 14 Apr 2022 15:40:19 GMT

Correct; turbotax does not seem to adjust basis correctly. I have several hundred wash sale transactions and TurboTax for PA believes this results in a net loss of over 1.5 million dollars. However, the true net gain/loss is a) positive and b) two orders of magnitude smaller. It is not realistic or possible to go through transactions one by one, so I view this as a limitation in the turbotax software when (incorrectly) translating from Federal to PA State reporting.

What I may do is add a single bogus transaction showing a 1+ million dollar gain to net-out the wash sale losses which aren't accurate.