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Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

TurboTax displays an error with my 1099-B showing a Wash Sale of corporate bond.  It says that "The transaction type is not a valid selection when accrued market discount (8a) is not zero."  I confirmed with my broker that reporting "W" in field 12a is correct.  There is an amount in field 8a.  Has anyone encountered this and how to solve?  

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5 Replies
JohnB5677
Expert Alumni

Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

What form are you posting from.  Those boxes do not make sense for a 1099-B.

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Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

I imported 1099-B from Fidelity.  I took a screenshot of the form displaying the error.  There is an an amount in 8b which it comes from 1g in the form

 

issue.jpg

 
 

 

 

ThomasM125
Expert Alumni

Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

Code "W" is referring to a wash sale, which is where you sell a stock at a loss and then by it right back. Does your sale result in a loss?

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Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

Yes.  it is actually a corp bond sale with a loss.  Should I change the code from "W" to "S" to fix the error even though that is how the brokerage firm reported it?

ThomasM125
Expert Alumni

Invalid transaction type (wash sale) when accrued market discount (8a) is not zero

It appears that you can't have a wash sale and an accrued market discount with the same investment sale. 

 

What you can do is enter the form 1099-B without the box 8 entry. Then, make another form 1099-B entry for the same company with just the box 8 entry. 

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