How do I report a Wash Sale?

To enter your Wash Sale into the program please follow this pathway:

1. Federal 
2. Income (Select my forms)
3. Investments
4. Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc.

Example

Mary purchased 50 shares of Dell stock for $500 ($10 per share) on January 1, 2019. She sold the stock for $250 ($5 per share) on May 5th of the current tax year. On May 15th (within 30 days of the sale for a loss), she bought substantially identical Dell stock. The new stock cost $6 per share.  Because this purchase was within 30 days of the sale for a loss, and because the purchase was of substantially identical stock, the loss would be a Wash Sale. Add the disallowed loss for the wash sale to the cost basis of the new stock. Report this Wash Sale as follows:

Schedule D Entry:

1. Description of Property: Dell Stock
2. Date Acquired: 01/01/2019
3. Date Sold: 05/05/2023
4. Sales Price: $250
5. Cost: $500 
6. Adjustment: $250 (amount you will add to the cost basis of the new stock)
7. Check Box for: Nondeductible Loss from a Wash Sale

What if my wash sale is a loss? 

A wash sale occurs when both of these apply:

• You sell or trade stock, mutual fund shares, or bonds at a loss.
• Within 30 days before or after the sale date, you:
  • Buy substantially identical stock or shares
  • Gain substantially identical stocks or shares in a taxable trade
  • Obtain an option to buy substantially identical stock or securities
  • Get substantially identical stock for a traditional or ROTH IRA

If you have a loss from a wash sale, you cannot deduct it on your return. Additionally, a gain on a wash sale is taxable. Forms 8949 and Schedule D will be generated automatically based on the entries. 

NOTE:  If you are entering a Nondeductible Loss from a Wash Sale, it would be entered as a positive number, differing from a loss which is entered as a negative number. 

When you report the sale of the newly purchased stock, you will adjust the basis to account for the loss. Report the new basis (from example above) of $550 (50 shares X $6 per share = $300 Plus $250 wash sale loss added to basis equals cost basis of $550) as the cost.