turbotax proceeds and wash sales

Discussion in 'Taxes and Accounting' started by fusiforme, Mar 1, 2018.

  1. I'm trying to figure out if I need to do any extra work with wash sales for stocks which I sold out of by eoy to make sure my proceeds are reported accurately on turbotax.

    right now I am working with the 1099 from my IB account.

    as an example, I'm looking at one stock I traded a few times which has a wash sale. this is a stock I was completely out of 30 days before eoy.

    On turbotax the total gains for these trades show up as: 1,200.47

    On my IB form there is an amount of 58.54 listed in the Wash Sale disallowed box.

    since I was out of this stock at eoy, I'm thinking I should be able to deduct the amount of the wash sale from the amount of the proceeds on my turbotax form, making the new amount of the proceeds: 1141.93.

    Is this correct or am I misunderstanding something?

    If I have clearly understood this I assume this means I'll have to go through every position on my tax forms which I got out of before eoy and manually adjust the amount in turbotax to reflect a deduction of the wash sale amount.

    thanks for shedding light on this issue.
     
  2. I'd like to hear the answer to this. I saw this when I downloaded a friend's Betterment trades into turbotax. My understanding is you's go back and add or deduct from the basis of the next trade such that if you did all of the trades during the same year you'd have all the PNL in that year. But, then, I think you end up with the same result . Do you have a MTM election and trader tax status?
     
  3. The reason I ask about trader tax status is IB is so funky and often, IMO, wrong. They reported 89,000 in nonqualified dividends as qualified on my 1099. It was a foreign stock with no dual tax treaty. I could have just left it alone and nobody would be the wiser unless I was audited...and even then I doubt it would be caught. With TTS you could just use the equity method and not report each trade...at least I've been doing it that way for years. Adjustments have to be made for tax free income on muni bonds, short interest, etc, but MTM and TTS makes things easier. Of course, if you end up holding something for years in a trading account, you are unlikely to be able to change it's character to LTCG and that cost me $120k in tax last year.
    Before 2018 there was a reason to do this because you could carry-back Net operating losses.
     
  4. Since no one replied to this I am going to relay the information I got here.

    I confirmed this with two different brokers, so trust it is correct.

    I was told that unless there is a special situation the cost basis which appears when the info is imported to turbotax should be correct. Although the wash sale shows up in its own column (which might lead you to believe you are not receiving the loss on a closed position) the cost basis itself is corrected by the broker the next time the security is sold.