I imported my Consolidated 1099 from TD Ameritrade it says Accrued market discount should not be 0 for 2 ETFs. When I try to enter a value, Turbo Tax won't let me. Help?

[jdlittle25]

Turbo Tax opens the form for me to input into the "Sale includes a disallowed wash sale loss (code W). Amount (leave blank if all)" field in the "Capital Gain (Loss) Adjustments Worksheet".

[jdlittle25]

Further update: It shows up as Wash Sales for 0.07 and 0.09 for each ETF.  Later on when I go to eFILE my tax return, the error checking lists it on the form as "0." and will not let me proceed.  Going back into my Federal return and looking at each of these individually in my Wages, they show up properly.  So I don't know why this is getting caught up with checking for errors.

[AnnetteB6]

The error messaging you are seeing with regard to the wash sale entries is a result of automatic rounding of the number imported from your broker or typed in by you.  If the wash sale adjustment is $0.49 or less, then it is automatically rounded to zero.  This type of rounding is allowed by the IRS.  Unfortunately, zero is not a valid value for this field -- thus the error message.

To resolve the issue, you can edit each individual transaction (although not from the screen in the review process) and delete the amount entered in the wash sale adjustment if it is $0.49 or less.  This will clear the error message.  

To do this, you will need to revisit the input section for the Form 1099-B transactions.  Use the following steps:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “1099-B” and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to 1099-B”
• Click on the blue “Jump to 1099-B” link
• Click Edit beside the institution name
• Click Edit beside each transaction that contains a wash sale adjustment amount of $0.49 or less
• Delete the wash sale adjustment amount and click Done

If you have too many transactions that would require editing, you can consider deleting your imported information and entering a summary of the different categories of transactions reported on your Form 1099-B (short-term covered, short-term not covered, long-term covered, long-term not covered).  This would require you to mail a copy (not the original) of your Form 1099-B from your brokerage to the IRS within three days of filing your return.  The Form 1099-B would be attached to Form 8453, which will print with your return.