I think I just did a wash sale - I need help.

[Jeb912]

I’m new to investing - I have a robinhood account and today I sold all my sales in a stock and made $4,000 - I took a tiny loss - but I instantly regretted the sale and brought all the stocks back within the hour. 

I’m now learning that this is a “wash sale” and I nervous about what happens next. How do I need to report this? It was an honest mistake and I’m seeking advice. How would I report this without getting in trouble worth big brother?

[Anonymous]

each lot of the stock (unless just 1 lot)  sold may have a different cost basis. so while the overall sale resulted in a loss there may be a gain on some shares and a loss on the others.  if there is gain, that is taxable, while the repurchase would wipe out the ability to deduct the loss on those shares.  nothing you need to do. the broker will do the calculations and for the replacement shares, the cost will be increased by the wash sale amount.  when you get the 1099B  for 2020 the wash sale will show up in the report.  

[Jeb912]

Ok - how do I make sure to report this correctly on TurboTax. I don’t want to break any laws and want to follow everything correctly.

Thank you for the reply - means a lot! 

[rjs]

You don't do anything right now. You will report the sale on your 2020 tax return, that you file in 2021. Most likely Robinhood will show the wash sale adjustment on your year-end 1099-B tax statement, and all you will have to do is enter the information from the statement into TurboTax.

[Anonymous]

you have two options.  the broker will report the wash sale on form 1099B (maybe a consolidated 1099B which reports info such as dividends and interest in addition to stock sales) that you will get some time in 2021.  you can manually enter the info exactly as shown on the form which will show all the info needed for reporting the wash sale or with the correct version of TT  (online basic I don't think handles security sales) you can import the 1099B from the broker which will pull in the proper reporting for the wash sale.    

if you get monthly reports from the brokerage you should see the reporting for the sale including the wash sale. this is for your info only and should match up with the year-end 1099B 

[fanfare]

Active traders - like yourself - generate a lot of wash sales.

It's nothing unusual.

The good news - your broker has to do the accounting for you.

The bad news - your wash sales must be itemized on Form 8949.

To avoid tax time headaches, you should avoid this situation where possible.