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Level 2

Question

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

Forum|Forum|3 years ago
August 2, 2023
13 replies
69 views

Hello,

I am getting the error:

Schedule 😧 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

Level 15

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.

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

@bobdobalina

bobdobalinaAuthor

Level 2

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

Level 15

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

Level 15

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.

Mike9241

bobdobalinaAuthor

Level 2

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

Level 15

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

hsinlunglo

Level 2

I encounter the same error in March 2026 to file my 2025 tax. After google search but not finding a good resolution I ask ChatGPT and the answer is. pretty good also much easier to follow:

How to fix it

✅ Option 1 (Best): Enter summary totals instead of individual trades

Go to your 1099-B section in TurboTax
Delete the detailed transaction import
Re-enter using:
- “Enter a summary for each category”
Use totals from your 1099-B:
- Short-term covered
- Short-term noncovered
- Long-term covered
- Long-term noncovered

👉 Then:

Attach the full 1099-B PDF (TurboTax will prompt you), OR
Mail it with Form 8949 if required

eyeballjames

Level 3

I spoked with TurboTax support over the phone and there is no clear resolution to this problem. Basically TurboTax can import 10,000+ sales on your 1099-B but can only calculate your schedule D if not over 4000 sales. TurboTax needs to be more transparent about their capabilities. I ended up entering the summaries and mail supporting documents after e-filing. However since my 1099B is pretty long(few hundreds pages), I just wrote a summary statement about my transactions and stated that these will match those on the 1099B that the IRS received from my broker.

Now that’s done with, I don’t believe I will continue to use TurboTax for next year if they can’t fix this problem. Does anyone know of reliable tax software alternatives that will handle high numbers of sales or let you attach pdf files with e-filing?