Wash sale losses disallowed

[PattiF]

The sales that were listed as uncovered were purchased before reporting of the purchase date was required to be reported by the brokerage firms.  A wash sale is a rule that doesn't allow you to deduct losses when replacement stocks or securities were purchased within a 30-day period before of after you sold substantially identically stocks. The brokerage firm would have indicated if this occurred on the Form 1099-B. It would have been reported if there were any.

[rmbatp]

I don't know about the originator of this question, but it doesn't seem to answer the question for me. I'm using Turbotax 2020 desktop, and have 15 entries where it won't accept the very data downloaded from TD Ameritrade. None of the wash sales carried into 2021, that is I didn't trade any of those stocks this year at all. All of these sales were last year. But there were many more than 15 wash sales reported on the 1099 than 15. TurboTax didn't have a problem with those. I've looked at each individual entry on the 1099 and can find no pattern on those that were accepted and those that were flagged. But overriding the flagged trades doesn't work. There must be an answer to this. I know that each sale carries into the next trade and it all comes out in the wash anyway, but getting TurboTax to understand reason is not working.

[JohnB5677]

Let's go back to basics.

A wash sale occurs when you sell a stock at a loss and then re-purchase essentially the same stock within 30 day (including January of a following year).  In this case the loss is disallowed, and you do not get credit for it on you profit statement.

Your broker should maintain this information.  The biases of the stock you re-purchased should increase by the amount of the wash sale loss.  Thus the net profit or loss will be accounted for when you sell the re-purchased stock.

This then is not a TurboTax issue, but rather an issue of the maintenance of your account by your broker.

Often if you change brokers the wash sale adjustments are lost.

[rmbatp]

I know what a wash sale is. The numbers are 100% correct on the 1099. I laboriously entered each into a spreadsheet and they came out to the exact penny. I have every trade in Quicken as well. It all matches and is all correct. The problem is on the worksheet, the only way to 'fix' it is to delete the worksheet, but that's not an optimal solution.

[JohnB5677]

Another alternative is to post a summary of the stocks.

Your brokerage statements should include a summary of your transactions, grouped by sales category, for example, "Box A short-term covered" or "Box D long-term covered." You'll enter the summary info instead of each individual transaction.

1. Open or continue your return (if it's not already open) and search inside TurboTax for the phrase stock sales.
2. Select the Jump to link in the search results.
3. Answer Yes to both Did you sell stocks, mutual funds, bonds, or other investments? and Did or will you receive a 1099-B form or brokerage statement for these sales?
   • If you land on Here are all your 1099-B sales, select Add sales from a different brokerage. Then answer Yes to Did or will you receive a 1099-B form or brokerage statement for these sales?
4. When asked how you want to enter your 1099-B, select I'll type it in myself.
5. Select or enter your brokerage on the next screen and continue.
6. On the following screen (Tell us about...), answer the questions until you reach the next screen. Select the second option, Let's enter a summary instead, and select Continue.
7. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue.

When you are done, you'll eventually come to the Here's a summary of your broker sales screen where you can edit, delete, or enter more sales.

How do I enter a large number of stock transaction... (intuit.com)

@rmbatp

[de_prof2003]

Tom,

I am using the TT program and was through answering all the income questions, but when TT checked my return, I got the following message: "Form 1099-B Worksheet.. Capital gn (ls) adjustments/other info (25459W862 SHARES 500 BULL ETF 25) Accrued market discount should not be 0. Enter amount disallowed under wash sale rules, or leave blank if entire loss is disallowed."

My brokerage statement seems to indicate that all wash sale trades have been disallowed since they all seem to be under the "disallowed" column.  Are all wash sales automatically "disallowed?"  I am uncertain what to do about this prompt because I never filled out any Worksheet.  SomeTurbo tax computer apparently did. 

Also, I also do not understand what a 1099-B Worksheet is, and I found no listing of such a form on the IRS website.  Also, what does a 1099-B form have to do with capital gains or wash sales?  The 1099-B is for interest and dividends no?

Furthermore, I have two accounts under the same broker, and both have wash sales for the same stock, so I do not know how much, if anything, to list in the "worksheet".  All of this is very confusing, so I hope you can help by clearing up some of the above.

Thanks  :  )

[MarilynG1]

@de_prof2003 You are correct that the 1099-B Worksheet is prepared in TurboTax from your entries. 

If you Print/Save your return, you can indicate you want all the Forms and Worksheets, so you can review them.  If you use TurboTax Desktop, you can view and make entries directly on the worksheets. 

Click this link for more info on Printing Forms and Worksheets.

This link on How to Enter a Wash Sale may help you. 

The 1099-B reports Stock Transactions; interest is usually reported on 1099-Int, and dividends on 1099-Div.  Here's an article on Form 1099-B. 

[de_prof2003]

Thank you Marylyn

I assume that you have read my latest post, which notes that I have been prompted to add an amount for a particular wash sale, and the 0,01 amount is not being accepted by Turbo Tax.

Are you suggesting that I finish the return without completing the error message?  Will Turbo tax online allow me to do that?

Also, the suggestion about using desktop seems like a good one, in that it will allow me, theoretically, to add a .01 entry for the amount that now reads zero.  However, will I need to manually adjust all related totals?

Lastly, how can I get the desktop version?

Best,

de_prof2003 

[de_prof2003]

Hi again,

     I could not find my original post which was apparently on this thread, and since then, I have done a lot of investigation on my own.  Consequently, I wrote another post today, in the credits section.  I will repost it here, now, as it will give you a clearer idea of exactly my situation. 

     My  problem involves a single wash sale.   The prompt I received from TT online wants me check my broker's 1099-B to validate the amount disqualified and to enter the correct amount because they say that the amount shown is zero.  Well, the disqualified amount was literally one penny  (0.01) and Turbo Taxes computers round all amounts, so, apparently, it comes up as a disqualified amount of zero.  A disqualified amount of zero cannot be correct because one cannot disqualify a non-existent dollar amount, so they want me to add a "correct" amount.  If I try to enter 0.01 or .01, such entries are not accepted.  In effect, the TT online worksheet provided to me refuses to allow me to add the correct amount.  So what can be done about this situation?  Is the best idea to simply ignore the error, finish the return, save a copy and edit the single, problem entry?  Again, I would need desktop to do that.  Thanks so much for your help  :   )

[rmbatp]

I had a similar issue. What I did was to override the box with the 'x' in it. That seemed to fix it.

[de_prof2003]

John,

Please see my response to Marylyn below to understand my situation.

Your suggestion of posting a stock summary might work for me, as I am apparently using the TT online version, and your suggestion seems to be possible with the online version.  Is that correct?

If so, do you think that when I finally get to the editing stage, Turbo Tax online will accept an entry of .01 if they have not yet done so on the error message that they are now giving me?

What do you think?

Best,

de_prof2003

[JohnB5677]

Yes, posting a summary to your return will work with the online version.

If the summary includes multiple transactions it will not be a problem unless they are all wash sales.

The .01 would be an issue if that was the only transaction in the summary.

[de_prof2003]

Thanks John.  Very helpful.  But I have one more important question.  I seem to remember seeing on one of these threads that, after Efiling, within 3 weeks, I would need to follow up the summary with an additional form  which actually details my trades.  Is that correct?  If so, what form, and how long do I have to get it to the IRS?  What happens if it is late.

Thanks again : )

[DianeW777]

Once the return is accepted (don't wait three weeks) you should mail the following.

If you are e-filing your tax return, then mail your statements along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).

[de_prof2003]

Thanks Diane.  I appreciate your help, but having to snail mail the form defeats my whole purpose in Efiling.  You see, I am quarantined abroad, and mail will take probably a month to arrive in the US - even if I use "Express International Mail" which costs me $40 and supposedly arrives in 7 days. 

If I have to follow up Efiling with a form, I may as well send my whole return via snail mail and avoid the $90 Turbo Tax fee.  Tens of Thousands of dollars in trades, and all this time and hassle over a stupid penny.  Hard to believe TT can't find a way to effectively deal with this glitch.  Sorry to sound so negative, as I really appreciate your taking the time to respond. 

Best,

de_prof2003.