topic Wash Sale Loss Disallowed Adjustment Code Not working in Deductions & credits

Wash Sale Loss Disallowed Adjustment Code Not working

riosj — Tue, 10 Feb 2026 11:26:46 GMT

Form 1099-B Worksheet (MORGAN STANLEY CAPITAL MGMT) -- Capital Asset Sales Wksht (1):

Adjustment code(s): Adjustment code(s) should not have an entry when a disallowed wash sale amount is entered. Remove the disallowed wash sale amount and include the adjustment here, or remove this manually entered adjustment code.

I could use some assistance fixing this error. I've tried entering the adjustment code W should I be using a different code? When I removed the adjustment code N is auto populated by TurboTax.

Re: Wash Sale Loss Disallowed Adjustment Code Not working

stanljl — Sat, 17 Feb 2024 19:26:46 GMT

same issue here and not able to edit or change cost code auto populated by turbotax to fix the issue with their software. Then amount involved is not rounded down to under 1 dollar either. interesting is this code is called manually entered according to turbotax and deleting should fix it but the software won't let you delete it seems like a software problem hope we can get a work around that won't add a huge amount of time on our part to filing process.

Re: Wash Sale Loss Disallowed Adjustment Code Not working

stanljl — Sat, 17 Feb 2024 19:43:06 GMT

So I deleted the amount disallowed in the 2 fields and entered 0.00 and the form allowed it.

Re: Wash Sale Loss Disallowed Adjustment Code Not working

riosj — Sat, 17 Feb 2024 20:18:07 GMT

My 1099-B looks as follows:

[1d] Proceeds $1695.78
[1e] Cost or other Basis $1714.21
[N/A] Total Gain/(Loss) ($18.43)
[1g] Wash Sale Loss Disallowed $18.43

When I tried using code W I get the above error. Will an update fix this?

According to the IRS instructions are to put a W: https://www.irs.gov/instructions/i8949

Re: Wash Sale Loss Disallowed Adjustment Code Not working

fanfare — Sat, 17 Feb 2024 20:30:47 GMT

"According to the IRS instructions are to put a W"

With tax software, W is a special case.

It will ask you for any disallowed loss and then put the code for you.

N is another separate case, the column (h) should be zero.

the software should handle it unless you are entering amounts by hand.

Re: Wash Sale Loss Disallowed Adjustment Code Not working

riosj — Sat, 17 Feb 2024 22:40:16 GMT

Right so I entered the disallowed loss from the 1099-B form and it populated N but when I try to file it returns the above error same goes for W. So what should be entered?

Re: Wash Sale Loss Disallowed Adjustment Code Not working

riosj — Sat, 17 Feb 2024 22:46:19 GMT

According to IRS instructions this is what N Stands for: https://www.irs.gov/instructions/i8949

You received a Form 1099-B or 1099-S (or substitute statement) as a nominee for the actual owner of the property

Report the transaction on Form 8949 as you would if you were the actual owner, but also enter any resulting gain as a negative adjustment (in parentheses) in column (g) or any resulting loss as a positive adjustment in column (g). As a result of this adjustment, the amount in column (h) should be zero. However, if you received capital gain distributions as a nominee, report them instead, as described under Capital Gain Distributions in the Instructions for Schedule D (Form 1040).

Re: Wash Sale Loss Disallowed Adjustment Code Not working

cjkbrighton — Sun, 18 Feb 2024 19:00:36 GMT

Same issue as described by RiosJ and Stanljl. The Capital Asset Sales worksheet creates an error related to the wash sale and adjustment amount for Morgan Stanley imported information. Turbo Tax advises to remove the "N" adjustment code which had autopopulated and does not allow manual adjustment.

For amounts (wash sales) below $0.50, the amount can be adjusted to $0.00 on the Income- Stocks..... for the imported Morgan Stanley. This addresses the errors for those transaction below $0.50. For transactions above that amount, such as that noted above, putting $0.00 would seem incorrect and cannot determine where this code can be manually removed in the software as it does not allow that on the worksheet page (where the Smart Check error is first highlighted)

A software update seems necessary to address. If others have a solution, it would be appreciated

Re: Wash Sale Loss Disallowed Adjustment Code Not working

BAV51 — Sun, 18 Feb 2024 21:32:24 GMT

I have the same problem. It allowed one wash sale to go through before E*Trade was taken over by Morgan Stanley but after Morgan Stanley took over the wash sale put a NW instead of a W in the adjustment code column. I think a software fix is needed.

Re: Wash Sale Loss Disallowed Adjustment Code Not working

RachelW33 — Wed, 21 Feb 2024 02:19:58 GMT

We are aware that some of our customers are having an issue with 1099-B's incorrectly importing with adjustment code N.

Please click here to sign up to receive an email notification when this issue has been resolved.

@BAV51 @cjkbrighton @riosj @stanlil @riosj

Re: Wash Sale Loss Disallowed Adjustment Code Not working

JoeColl — Wed, 28 Feb 2024 03:15:33 GMT

I received an email notice that a fix had been implemented and would be in the next update. So far, I haven't had an update that fixes the issue. Then today, I received another email that it was still being worked on. Can you advise which is accurate?

Thanks,

Re: Wash Sale Loss Disallowed Adjustment Code Not working

JotikaT2 — Wed, 28 Feb 2024 03:51:25 GMT

The issue appears to have been corrected. However, most software updates do not occur until Wednesday or Thursday.

Please log back in on Thursday, update your software, and try again.

If you are still receiving an error message after running the updates, please comment back so we can investigate further.

@JoeColl

Re: Wash Sale Loss Disallowed Adjustment Code Not working

LY2003 — Thu, 07 Mar 2024 21:17:33 GMT

It is not working. I have wash sales (E*trade/Morgan Stanley) as adjustment, and it says you have to have a code if you have any adjustment. However if you enter the code W, it says you already checked the disallowed wash sale box so you should NOT enter code W. So what to do??