After E-Filing yesterday i discovered a wash sale on my 1099B that i failed to report. My capital losses are overstated. My return was accepted, what should i do now?

[MichaelMc · Accepted solution]

If you have already filed your original tax return for 2018 please do not file an amendment before allowing sufficient time for the IRS to process your original tax return. Doing so could cause confusion at the IRS and result in substantial delays for you.

Allow the IRS to process your original return and issue any refund that was claimed on that return. Only then should you file an amendment, paying back any excess refund that you received or claiming any additional refund due to you as a result of the amendment.

The IRS allows you to file an amended return only to correct your filing status, to cure any errors you make in claiming dependents, to increase or decrease the amount of income you originally reported (such as including an omitted Form W-2 or Form 1099), and to add or eliminate any deduction or credit.

Amended returns cannot be e-filed. Your must print, sign, and mail Form 1040X, along with a corrected copy of any affected form or schedule.

If the original return includes mathematical errors that affect your tax liability, you should provide the IRS with sufficient time from the original filing date to fix the error; generally, the IRS can detect and correct math errors on tax returns within a reasonable amount of time. The IRS will notify you of any change it makes to your tax return. If additional changes are still necessary after receiving notice, only then should you amend the tax return.

[matt21]

Thank you for the prompt response!  If I may add one more wrinkle into this....   I was informed that I needed to file an 8949 once my federal return was accepted(yesterday).  When I was compiling the 1099B's to send instead of the 8949 I discovered that I omitted the wash sale adjustment that thereby overstating my capital losses.  The impact of omitting my wash sale was an impact to my capital loss carryover amount ONLY as either way I still unfortunately have enough capital losses to hit the maximum allowed for this year.  Bottom line, I am skeptical to your first point that the IRS will be able to process my original tax return without sending in the 8949(which would highlight the discrepancy vs my tax return) OR filing an amendment.  That's the last time I use the summary feature instead of waiting to use the upload feature!

[MichaelMc]

Thank you for the additional information. Go ahead and send in the Form 8949 or copies of the Form 1099-Bs. The IRS will, in all probability, uncover your omission and send you a notice of the adjusted tax. If the IRS does not, you still have the ability to file the amendment, after the original return has processed.

[electricshoots]

Sir, I have the same situation as above but I used standard deduction so really the loss/benefit wouldn't have helped me by my omission of the wash sale in less than $300 of a loss amount. Given that I used standard deduction anyway, would filing an amended 8949 etc later on, matter at all? Shall sincerely appreciate your insight. Thank you

[ranthor]

Hello, 
I was wondering if you were able to resolve this issue? I found myself in a similar boat after realizing that some of my wash sales losses were not recognized in my 2019 statement (it is funny bc I used the software to automatically extract that info and somehow it did not add the wash sale to the calculation). When I look at form 1040x, I can't even see where or how I can address this issue? I never got anything from IRS and would assume they would correct this if needed since all of my capital gains or losses are reported automatically?