Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Returning Member
posted Dec 27, 2021 8:00:05 AM

Short term stock loss

My accountant said that I have to pay taxes on my stock losses because I had them less then 30 days.  Is this correct? 

0 4 458
4 Replies
Level 15
Dec 27, 2021 8:21:17 AM

All stock sales of all durations are reported on an income tax return ... what this will cost in taxes depends on many different factors.    The broker will issue a consolidated 1099 form sometime in February which you must report on the return...  don't file without it.

Level 15
Dec 27, 2021 8:28:15 AM

You do not pay taxes on net losses from the sales of securities.

 

What might have happened is your accountant did not adequately explain the wash sale rules to you.

 

See https://www.irs.gov/publications/p550#en_US_2020_publink100010601

Level 15
Dec 27, 2021 9:48:59 AM

you have to pay taxes on gains, which will not be offset by any wash sale losses disallowed.

That's all there is to it.

 

---

Reporting:

As an active investor, be aware that your category Box A or Box D sales without adjustments do not require Form 8949, so there is no reason to import or key in those transactions.
Instead use the "enter a summary" option to put your numbers on Schedule D Line 1a or Line 8a.
--
If you have wash sales, it gets more complicated since those adjusted transactions have to be itemized on Form 8949 and the summary totals adjusted accordingly.

Enter the wash sales on Form 8949, then use the subtotal results on the bottom of that form (Line 2) to know how much to subtract which gives you the Schedule D line 1a totals. Be sure to NOT check the adjustments box in the summary window.
--
Alternatively, if entry of Wash Sales is too tedious,
summarize and check the box for adjustments and enter the disallowed amount.
This summary will go on Schedule D Line 1b.
You will be making the mail-in election.

Level 4
Dec 29, 2021 1:36:08 PM

I think the situation is that you have gains and losses. The losses are more than the gains so you would not think you would owe tax. But since there are the wash sales rules you are not allowed to take the losses. You just have the gains and you pay tax on those.