Form 8949 Rounding Error?

[wa1fhy]

I sold a personal item on eBay for $94.53.  My cost was $120.17.  So that is a loss of $25.64 which I am not permitted to take, i.e., there will be a "Code L" adjustment of $25.64 on the capital gain data so that my net loss is $0 as it should be.  

However, after filling in these (fractional) amounts, TT produces a Form 8949 entry that says $95 sales price, $120 cost, $26 adjustment, leaving me with a net $1 gain!

In other words, even though the 1099 worksheets are correct with fractional numbers, the translation onto Form 8949 incurs a ridiculous result from rounding the individual numbers before application.

The obvious workaround is to enter only whole numbers when I am filling in the sales and purchase prices, but it is somewhat annoying that TT makes this error.  I used to use TaxCut and that wouldn't allow you to enter fractional numbers in the interview, so even though the rounding responsibility was left to the user, the math on the resulting forms were correct.

[rjs]

TurboTax rounds all entries because the IRS prefers it. (Maybe the IRS requires it for tax software.) There is no longer a place for cents on most IRS forms, including Form 8949. The IRS doesn't care about small rounding errors. They don't want to bother with cents.

[dmertz]

Even though the result seems unreasonable, this is actually not an error by TurboTax.  The IRS instructions for Form 8949 say that if rounding is done, all amounts entered must be rounded.  TurboTax is following this instruction precisely and the consequence is that you end up with a $1 gain.  The same would be true if you prepared Form 8949 yourself and used rounding in the way that the IRS instructs.  The only way to end up with $0 of gain or loss in this case while simultaneously following the IRS instructions would be to carry the cents everywhere on the form.  TurboTax does not provide an option to carry the cents on this form.

[wa1fhy]

I appreciate the comments about rounding.  However, depending upon the numbers, the final "net" column in Form 8949 can show $1, $0 or ($1) because of this rounding.

The $1 is bad enough, since it gives me a gain when there should be none.

But the ($1) is even worse since it violates the rule that losses on a sale of a personal item cannot be taken.  Is the IRS going to accept a Form 8949 showing that one dollar loss?

Seems to me that the IRS rounding rule should be amended to allow the taxpayer to enter a Code L correction on 8949 that is exactly the integer amount to offset the integer loss obtained by rounding both the purchase and selling prices.  In other words, that obviates the fact that round(A - B) is NOT necessarily equal to round(A) - round(B).