How to claim wash sale disallowed-losses in the following year?

[33bmarc]

I accumulated a bunch of wash sale disallowed losses from options trading on my 2020 return. I’m hoping you can claim these losses on the 2021 return.

I search everywhere but can’t find specifics on this, anyone know if this can be done?

thanks

[Mike9241]

your broker will adjust the tax basis of the securities to account for the wash sales.  so if you sell the securities in 2021 and do not create another wash sale(s), you will get the benefit of the loss disallowed in 2020.  for most taxpayers net capital losses are capped at $3,000. there is nothing you need to do. 

[33bmarc]

Really? That’s pretty great. So nothing to claim on TurboTax, just watch out for new wash sales.

Thanks for replying.

[JohnB5677]

When you sell an investment that has lost money in a taxable account, you can get a tax benefit. The wash-sale rule keeps investors from selling at a loss, buying the same (or "substantially identical") investment back within a 31-day window, and claiming the tax benefit.

If you sell a stock at a loss and purchase it back within 31 days it will create a wash sale.  That loss then carries over to the new purchase and is added to the cost basis of the newly purchased stock.  

Your broker should keep track of this, and it should be reflected in the future cast basis for profit/loss purposes

To enter a disallowed Wash sale:

Income & Expenses

1. Scroll to Stocks, Mutual Funds, Bonds, Other
2. Answer Yes to Did you sell stocks, mutual funds, bonds, or other investments in 2020?
3. On the OK, what type of investments did you sell? screen, select Stock, Bonds, Mutual Funds. Then select Continue.
4. From here, you can import or manually enter your 1099-B.
5. Answer the questions about your sales. Choose to Enter sales one by one when asked.
6. On the Now, we'll enter one sale on your 1099-B screen, enter your info.
7. Check I have other boxes on my 1099-B to enter and enter the disallowed wash sale loss in box 1g.
8. Select Continue and answer any follow-up questions.

Note: You'll need TurboTax Premier, TurboTax Live Premier, or TurboTax Self-Employed, TurboTax Live Self-Employed, to add any 1099-B forms.

[jenny-lee635]

Some brokers do not adjust the cost basis.  What do you do then?  Just add the disallowed wash sale amount to the new security you bought after the wash sale to increase the cost basis provided you have closed all the positions?

Thank you.

[fanfare]

Do you have a broker that disallows a loss but does not adjust the triggering buy?

That does not sound good.

If you are doing all your own record keeping then the answer is Yes.

@jenny-lee635 

[fanfare]

maybe you are misreading your documents,

double check your statements and 1099-B against the amount actually paid.

the reported cost should be greater than the actual cost

@jenny-lee635