Does TurboTax calculate partial wash sale?

[williambchadwick]

I took a $4k loss on a security. Within a few days, I bought a few shares ($10) just to track the stock.

The $10 shares should only partially wash out the $4k loss. Does TurboTax recognize this? Or with their software, does the $10 purchase wash out the entire $4k loss?

Or is there a way to manually input partial wash sales?

[Critter]

Your broker should automatically show the partial wash sale calculation on the 1099-B so you will just enter their numbers if you don't just import the information.

[TomYoung · Accepted solution]

Assuming the sale and purchase were done through the same broker the broker will address the wash sale on the Form 1099-B.  The 1099-B should have a code of "W" in Box 1f and a dollar amount in Box 1g.  You simply enter the 1099-B as it reads into TurboTax and that should take care of it.

The dollar amount should be: (few shares bought/number of shares sold) x $4K.

Tom Young

[BobinDC]

If the security sold is a MLP it is not so simple because the taxpayer must adjust the cost basis that the broker reports using data provided by the MLP in its K-1.  This is because some, or all, of the funds paid out as dividends are treated as a return of capital because the large amount of asset depreciation creates an accounting loss but has no effect on the MLP's cash flows.  

The taxpayer has to determine the cost basis of each lot of shares sold because the K-1 provides the adjustment for each such sale.  Wash sales further complicate this because of the need to track where the disallowed losses get allocated.  Making things worse, you can't trust the broker to do this correctly.

[Critter]

If you make manual entries click this box ...