Wash sale losses disallowed

[de_prof2003]

Hi again Diane, Marilyn, John, and other fine folks.

While feeling morose here a minute ago, a hopefully worthwhile idea occurred to me.  Since I have not yet completed my online return, suppose I order the Desk Top version of TT.  Would that option allow me to keep the one cent entry on the 1099 worksheet, or would I need to manually change it to  zero? 

Would either option allow me to Efile my return, using the desk top version, without Turbo Tax flagging the was sale once again in the income check up?  Sorry for all these dumb questions, but I have never used a 1099-B worksheet or the desk top version before.

Thanks again,

de_prof2003

[MarilynG1]

@de_prof2003 You can enter a Summary in Lieu of Individual Transactions.  Click this link for more info on How to Enter a Summary in Lieu of Individual Transactions.

If you imported your transactions, click this link for info on How to Delete Imported Transactions if you choose this option. 

[amedawar]

No they can't fix this.

They just told me this was my fault!!! Ridiculous. 

[ReneeM7122]

No, it's definitely not your fault.  The wash sales error is due to rounding.  If a wash sale adjustment is $0.49 or less, then it is automatically rounded to zero by the software.  This type of rounding is allowed by the IRS but unfortunately, zero is not a valid value for this field on the 1099-B form, so it causes an error.  To resolve the issue, here is a solution that might work for you instead of mailing.  You can edit each individual transaction and delete the amount entered in the wash sale adjustment if it is $0.49 or less.  This should 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

@amedawar

[wizardofhaas]

I was about to uncheck this box, same issue, but is that the right thing to do? Can a TT employee validate?

[de_prof2003]

I tried the suggested fix, deleting the amount by following the instructions that our expert above noted, and that solution would not work.  The error prompt keeps coming back in the income wrap up and will not let me proceed further.

Why are we being told this if the solution does not work? 

What to do now?

[amedawar]

Yea, I don't understand why this is so difficult for TurboTax understand.

Everyone keeps saying that I don't understand wash sales and wants to charge me to talk to a tax expert. However, this is not a tax problem. The numbers are correct, but it won't let me enter them. 

There is obviously a problem with the website, and turbo tax wants to say that we just don't understand how to do our taxes.

Please fix this!! Obviously there are many others with this problem. I have already been charged by a customers service representative right before I was about to file. Then the call disconnected, and the error occurred. 

I was on the phone all day and no one could fix it. They just kept telling me I was wrong and wasn't listening- they sent me articles on how to enter wash sales. I know how to enter wash sales- and I showed them, but the problem was obviously above them, and they were quite rude. 

[rmbatp]

I don't know if this will help or not. I had a bunch of trades flagged as wash sales. It appears the issue occurs only if the wash sale amount is less than $.49, it should be rounded to 0. I believe that TurboTax did indeed round it to 0, but left an 'x' in the box. I simply 'overrode' the 'x' by deleting it and everything worked fine. I won't vouch that this is a perfect fix, but the form never goes to the IRS, it is used for TurboTax's internal bookkeeping.

[amedawar]

Thank you, I will try that.

So far I haven't been able to keep it as zero (the correct amount) or even a 1 as others have suggested.

I will try the X and see if that makes the error go away.

Just want to get my stupid taxes done! 

[wizardofhaas]

After about a day of internal debate in my head, I opted to remove all the ‘x’s. I then was able to file without issue or errors. Per the recent comments I still think this is a low risk workaround so I was willing to take the chance this way. Good luck to all in same boat, hopefully a better fix will come in future.

[hunterghawkins]

Hey there, I am running into the same issue. I have two separate wash sales of .32 and .33 respectively. I have tried deleting to "0", tried inputting "1", tried ".50" and "x". These all have been rejected. Does anyone have an answer to this yet? I obviously don't want to pay $70 to talk to someone over less than $1, nor do I want to file by mail when I am efiling. We cannot be the only people with this issue. Any ideas are welcome! Thank you all for your help. 

[rmbatp]

I overrode the box with the 'x' in it and deleted the 'x'. That fixed it for me.

[silver8ack]

Do any of you people realize that wash sales go away if you liquidate the position and dont trade it again for 30 days?  

All you have to do in answer the question instead of telling everyone they are wrong and their brokers are right. The brokers are NOT right if they are reporting a wash sale when the security has at some point before the end of the year has been completely sold and not touched again for 30 days(even into the next year).

The question is.. .what is the proper way to remove these wash sales in TurboTax?

[Anonymous]

@silver8ack  the wash sales don't exactly "go away" - you can adjust the basis of the trade so that it is as if the intermediary sale didn't happen but the loss that the trade with the wash sale notation is reporting in these imports can't be deducted.   

To correct for an ultimate final disposition of the stock, you would do best not to import at all and to use your own records for those trades or to delete those lines at least as you have some basis to correct from the trades as reported.  You don't get to take the loss on the wash transaction and then report the gain or loss on the second one - you have to report it as if it was one transaction with the first purchase as your open and the final disposition as your close.    There isn't a magic "workaround" that lets you take the wash loss - you can't take the losses on these trades.  You can't.    though you can make an alternate basis adjustment if you sold it later. 

What these users are encountering isn't an error in reporting really on either side but simply a problem caused by the rounding of entries under fifty cents.  The program won't take zeros in that field (the natural result of the rounding calculation) but it will take a BLANK entry in these fields.  Hopefully, a fix will come out to wipe out those fields when zero is the result but it's not yet out.  Users can wait for an update or they can delete each entry manually, which gets a little tedious.  

[TomYoung]

Just an update here to say that apparently Schwab DOESN'T know how to calculate wash sale losses correctly.

I had a wash sale loss this year (2020) and Schwab calculated the incorrect deferred loss.  The deferred loss on the 1099-B was exactly twice the correct amount.  I've spoken to Schwab and they have acknowledged there was an error in their calculation.

I would guess that this wasn't a simple "one-off" error and I just happened to be the only unlucky individual in their universe of clients.

You might want to make your own calculations.

Tom Young