Error about Schedule D line 16. Exceeded maximum noncovered sales.

[bobdobalina]

Hello,

I am getting the error:

Schedule D: Line 16 does not include capital asset sales because you have exceeded the maximum number of noncovered sales.  Since you have more than 4000 noncovered sales, you wil need to remove some of the noncovered sales.  They can be replaced by entering a summary and attaching a statement to your return with the individual sale details.

I have close to 10,000 cryptocurrency transactions as well as stock trades. 

My return is blank for anything capital gains related when I preview/save it.  What is the correct step to fix this. 

I am showing a ton of Capital Asset Sales Wksht instead of a 8949 I think.

How can I fix this?

[fanfare]

devise a new arrangement for aggregating your crypto activity to reduce the number of transactions.

one possibility -

twelve transactions that summarize the cost proceeds and gain loss by month.

OR

four transactions that summarize the cost proceeds and gain loss by quarter.

@bobdobalina 

@bobdobalina 

[bobdobalina]

I have an aggregated version that lumps all the gains/losses together

for example it shows 2 short term ETH trades

one that is a large negative number for all the losses

one that is a large positive for all the gains.

If I use this don't I need to note or physically mail in the full transactions?

[fanfare]

Only SELL transactions have to be detailed on Form 8949 with Box C or Box F checked.

I suggest you prepare a PDF file of your details and have it available when you e-File.

Use tax software that accepts and attaches a PDF file when you e-File Schedule D with a summary.

I don't know if TurboTax is going to work for you to comply with the IRS detail reporting requirements when you have so many transactions that TurboTax will not support that.

Other tax software will handle  a PDF file of your details.

---

my original suggestion was to not report strictly correct, and hope for leniency from the IRS.

@bobdobalina 

[Mike9241]

covered transactions with no adjustments can be reported as just a total on schedule D line 1a (short-term - type A) and/or 8a (long-term - Type D)

Types B, C, E, F, X and Types A and D with adjustments can be entered as single line items (use code M) on form 8949, or you can report all trades on the 8949 with totals by type. this will enable you to e-file.

what is then required is to mail in Form 8453 and attach details of the trades by type as reported on the 8949. Using code M will automatically check the proper box on the form 

https://www.irs.gov/pub/irs-pdf/f8453.pdf 

read the instructions as to when and where to file. 

.  

[bobdobalina]

How can I manually enter code M for the trades it aggregated.

For example all of my ETH trades are aggregated into one loss, but turbotax only lets me change it to "see attached summary" instead of letting me just check code M.  I went to forms and overrode but it just adds a new blank line with code M instead of letting me add it to that line.

[fanfare]

you don't need code "M" to mail details to the IRS.
Form 8453 is just a cover sheet to identify you and your document. It is not to be signed.

I recommend also putting name, SSN and tax year as a heading on the first page of the details.

@bobdobalina 

[adamhurwitz]

Are there instructions for how to physically mail in separate documents to the IRS so that it will be included with the rest of your e-filed info correctly?

As I see from reading through TurboTax Community posts there does not seem to be a way to attach additional documents when e-filing.

[JotikaT2]

That is correct. You cannot attach documents when electronically filing.

If you need to submit additional documentation, Form 8453 will be generated by TurboTax.  This form will need to be mailed in with the remaining attachments.  Please see this link for more details as well as instructions on where to mail the form and supporting documentation.

@adamhurwitz 

[fuelnow]

Can you provide step by step instructions on what someone should do if they have over 4000 transactions (in my case they are crypto transactions)? How do we fill out turbotax so that we can get appropriate tax calculation (because right now as OP mentioned, if it is over 4000, taxes are not calculated on turbotax for ANY of the crypto transactions). 

[eyeballjames]

Hi did you ever figure out a solution to your problem? I am having the same crisis now with over 4000 limit error. 

[JamesG1]

You may be able to enter summary information instead of each individual transaction.  You would create a .PDF of the IRS form 1099-DA or IRS Schedule 8949 to upload into TurboTax Online.  Follow these steps. 

1. Down the left side of the screen, click Federal.
2. Down the left side of the screen, click Wages & Income.
3. Click the down arrow to the right of Investments and Savings.
4. Click to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).  Click Add investments.
5. On the Save time and connect your financial accounts screen, select Enter a different way.
6. On the How do you want to add your docs? screen, select Type it in myself, then Continue.
7. At the screen OK, let's start with one investment type, select Digital Assets.  Click Continue.
8. At the screen Let's get started typing in your digital asset info, enter the information. Click Continue.
9. At the screen Did you get a 1099-DA from XXX?, select Yes.  Click Continue.
10. Answer the questions at the screen Tell us about the sales on your 1099-DA.
11. Do you have more than three sales, enter Yes.
12. Did you buy every investment listed, enter Yes.  Continue.
13. On the screen Now, choose how to enter your sales, select Sales section totals.  Select Continue.
14. At the screen Look for your sales on your 1099-DA, select Continue.
15. You will now be able to enter the total proceeds (sales) and cost basis, along with the sales category.  Click Continue.
16. At the screen Review your XXX sales section total, select Add another sales total as needed.  Click Continue.
17. At the screen Now we'll help you upload your 1099-DA since the IRS requires a copy, upload the .PDF file.

@eyeballjames