Wash Sale Loss Disallowed

[laxworld322]

I keep getting told that I need to fix my federal return which brings me to fix some wash sales (1g) on the order of pennies. The box doesn't let you enter any decimals. I'm unable to move past this without resorting to file by mail.

Apparently multiple other people are having the same issue, with no response from Turbotax.

[JohnB5677]

To enter a disallowed Wash sale:

1. 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.

[laxworld322]

@JohnB5677 This is not the issue. I have already entered the wash sales. I have reviewed them on the page where you enter wash sales and the numbers are correct according to my 1099-B. However, Turbotax tells me that there is a problem and that I must review those sales. While going through turbotax review for the wash sales (different page then where you enter the wash sales) the values have all rounded to 0 and it is impossible to enter decimal values - everything gets rounded. The prompt to review the numbers never goes away and I am unable to file.

[AnnetteB6 · Accepted solution]

This issue is currently being investigated and addressed by the appropriate team.  In the meantime, see the information below for two possible workarounds -- editing each individual transaction affected, or entering a summary of your transactions and possibly submitting Form 8453 and your documentation to the IRS.

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 may 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.  

@laxworld322

[Xer]

how long would it take the team to fix this issue? 

[TerukoL]

As of right now, we do not have an ETA on when our tech team will resolve the issue, but they are working as quickly as possible. Please check back soon.

[fukboi4lyf]

This is really frustrating. I can't even use CTRL + F with the stock names to find the ones that have the unrounded decimals. Been trying to do this for hours to find 6 stocks. Every time you hit back it brings you back to page one.  

[Merry Widow]

I've just gone through this with 7 of those "0" errors.  When TT offers to correct the problems one by one, you have to scroll to the top of the form to get the exact name of the stock (including the beginning number). Then go back to the TT page that lists all your income. Go down to Investments and click edit. That will give you the list of all the stocks that were sold. Scroll until you find the one you want. Edit that. Eventually, you will find box 1g with the .49 or less entry. Delete it. Click Done. Unfortunately, you have to go back to the REVIEW section of TT to get the identity of the next problem entry. This is tedious, but it works!

[SLYKTAX]

I cannot find an answer whether it is a wash sale or not. 

Let say, I bought 100 shares of ABC at $5,000 on 1/2/2020 and another 100 shares for $3,000 in 1/29/2020 (within 30 days).  On 3/4/2020, more than 30 days from 2nd purchase, I sold the first 100 shares for $4,000.  That $1,000 loss shouldn't be considered a Wash sale, correct? If I sold it for $4,000 on 3/1/2020 which is less than 30 days from second purchase, that is Wash Sale?

[JohnB5677]

You are correct that if you sold a stock at a loss, and then re-purchased it within 30 days or less it would be a wash sale. 

However, 1/29/2020 - 3/1/2020 is 31 days because of leap year.

This then qualifies it as a regular sale.

[artu333]

So, I figured how to put the Total
Wash Sale Loss Disallowed. But now I need to report  the  (sales expenses not included on form). How do I do that? I put the total wash sale on the box, and it doesn't have  other box to report those expenses. Should I substract it from the total wash sale?

[JohnB5677]

The commissions that you pay when you buy and sell stock reduce your taxable income because they are added to your cost basis and deducted from your sale price by the broker.

Most other investment-related deductions are reported as miscellaneous expenses. Here are some common deductions:

• Investment management or investment advisor’s fees (fees paid for advice on tax-exempt investments aren’t deductible)

• Legal fees involving stockholder issues

• Service charges for collecting interest and dividends

The tax laws allow you to write off certain investment-related expenses as itemized expenses on Schedule A.

[artu333]

I did my math on some of them and it doesn't include borrow fees from shorting , that's why I'm asking.

[DianeW777]

You include any costs in the transaction as part of your cost basis, it will still remain a disallowed wash sale if applicable. You must change the cost basis to reflect going short fee.

[SLYKTAX]

I read the  wash sale rule that says: you sell at a loss and within 30 days you bought back at cheaper price is  Wash Sale.

Does that mean "Sell" need to come first before you buy them back within 30 days?

Will this be a Wash Sale if I bought XZY on 3 occasions,  each time is within 30 days from the previous purchase. Then I sell the first purchase within 30 days of my last (3rd) purchase at a loss?