Wash sale loss was $0.03. TurboTax rounds this to zero. TurboTax will not accept zero. TurboTax will not finish my return because of this. How do I proceed?

Do not report your 3 cent loss at all.

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.  

@adowns284

AnnetteB6...

Your response solved my problem.  Thank you for your help.  My tax form was completed, sent off, and accepted by the IRS. 

Manually entering did not work for me, UNLESS I enter the wash sale as blank.

I have three wash sales giving me the error (.11, .11, .18). If I manually enter these and leave the box blank, will it cause me any issues? 

No, The IRS allows the rounding down of Wash sales.  Entering a null will resolve the data problem and will not be an issue with the IRS.

@jleasure

@JohnB5677  "The IRS allows the rounding down of Wash sales." You almost answered my question. But more specifically please answer if the IRS allows a numeral "0" in the Wash Sale adjustment column of Schedule 8949 (column g of 8949).  If they do, i think we're all good, or least i am. I'll just file my tax return with the 0 there in column g. I am not concerned with the TT software making an issue with the 0 only if the IRS has a problem with it. Thanks in advance! 

Update: I now see what's going on here. The software actually is preventing efiling due to the "error". Haven't been able to get around it yet. Worst case, i might have to mail it in.

How do you determine which trades are wash sales? They are not labled as such and there are hundreds of transactions imported from my broker.

Would appreciate your insight. This error is preventing me from filing my return.

A wash sale is notated with the adjustment code "W". And if you downloaded with TurboTax, TT will download the transactions into either of Schedule D or 8949. If there is no adjustment code, their aggregated totals are input into Sched D. If they do have a code, they're put into 8949 and their totals are input into Sched D on a separate line. 

While this might solve the solve problem, a much easier solution for the customer would be to simply allow "0" to be entered in that field! Then we wouldn't have to comb through hundreds of trades just to file our taxes.

I feel your pain. Just wasted 3 hours of my life... garbage software

I fixed my return by changing the "0" to a "1". It was a suggestion made by another poster and i think it's a good one or good enough for me. A transaction notated with "W" needs a positive amount listed in the disallowed amount column. So, 0 is not acceptable, so it's $1.

They are labeled with a "w"next to it. In the columns of wash sale disallowed. The tax software ware will pick up the ones you need to go and change. Otherwise you can't electronically file

TT team,

Why not change the coding behind the platform for whenever there's a value below $1 it defaults to "null"?

I just spent 4 hours between figuring this out and actually making the changes in my worksheet.

Thanks,

-W

how do I make the change in the worksheet? TIA

You will need to try to enter an even dollar - just $1 - and see if it goes through. PS is aware of this issue and is working to resolve this. If you've imported your brokerage statement, that does make for some more work for you. Is this the case? Or can you manually enter $1 for that wash sale? FYI, a $1 should have NO effect on your bottom line tax bracket. 

I don't think that's a true statement. Unless I'm doing something wrong, when you have a lot of small disallowed wash sales less than .50c, it adds up increasing your tax liability if you round it up to $1.

The error message you are seeing on the wash sale entries is a result of automatic rounding.  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 for TurboTax, thus the error message.

To enter a disallowed Wash sale:

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.