Here is an example of how to enter a wash sale in our program:
Mary purchased 50 shares of Dell stock for $500 ($10 per share) on January 1, 2016. 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:
- Description of Property: Dell Stock
- Date Acquired: 01/01/2016
- Date Sold: 05/05/2019
- Sales Price: $250
- Cost: $500
- Adjustment:$250 (amount you will add to the cost basis of the new stock)
- Check Box for: Nondeductible Loss from a Wash Sale
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.
Form 8949 and Schedule D will be generated based on the entries.
When you report the sale of the newly purchased stock, report the new basis 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.
Click here for information about what is considered a Wash Sale.