If you're reporting a wash sale, you'll enter the transaction in the Investments section and then make the appropriate wash sale adjustment. The program will automatically generate Form 8949 and Schedule D based on the information you enter.
How Do I Report a Wash Sale?
Follow this path in the program:
- Federal
- Income (Select My Forms)
- Investments
- Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.
When entering the sale, be sure to include any wash sale adjustment shown on your Form 1099-B or brokerage statement.
What Is a Wash Sale?
A wash sale occurs when:
- You sell stock, mutual fund shares, bonds, or certain other securities at a loss, and
- Within 30 days before or after the sale, you:
- Buy substantially identical securities
- Acquire substantially identical securities through a taxable trade
- Obtain an option to purchase substantially identical securities
- Acquire substantially identical securities in a Traditional IRA or Roth IRA
Under IRS wash sale rules, the loss is generally not deductible in the year of the sale. Instead, the disallowed loss is added to the basis of the replacement shares.
Example of a Wash Sale
Assume Mary purchased 50 shares of Dell stock for $500 ($10 per share) on January 1, 2019.
She later sold the shares for $250 ($5 per share), creating a $250 loss.
Ten days later, she purchased substantially identical Dell stock. Because the repurchase occurred within the 30-day wash sale window, the loss becomes a wash sale and cannot be deducted at that time.
Enter the Sale as Follows
- Description: Dell Stock
- Date Acquired: 01/01/2019
- Date Sold: 05/05/2026
- Sales Price: $250
- Cost Basis: $500
- Adjustment Amount: $250
- Select Nondeductible Loss from a Wash Sale
The $250 adjustment eliminates the deductible loss on the current sale.
Important: Enter the Wash Sale Adjustment as a Positive Number
When entering a nondeductible wash sale loss:
- Enter the wash sale adjustment as a positive amount
- Do not enter it as a negative number
This differs from other loss adjustments that may be entered as negative values.
What Happens to the Disallowed Loss?
The disallowed loss is added to the basis of the newly purchased shares.
Using the example above:
- Cost of replacement shares: $300 (50 shares × $6)
- Wash sale adjustment: $250
- New adjusted basis: $550
When you eventually sell the replacement shares, use the adjusted basis of $550 when reporting that sale.
This allows the previously disallowed loss to be recognized later, assuming the subsequent sale is not also subject to wash sale rules.
Where Does the Information Appear on My Return?
After entering the transaction:
- Form 8949 is automatically generated to report the sale and wash sale adjustment.
- Totals flow to Schedule D (Form 1040), where your capital gains and losses are calculated.
Tip: Many brokerage firms report wash sale adjustments directly on Form 1099-B. If your brokerage has already calculated the adjustment, carefully compare the amounts entered in the program to your brokerage statement to avoid duplicating the adjustment.