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I am attaching the 1099-B but there is a Wash Sale loss disallowed and it won't let me put in the code M.

Ok all.  I have a detailed 1099-B and have chosen to attach a PDF to the return to avoid putting in all the individual dated transactions.  But I have an issue.  There is a Wash Sale disallowed and when I try to enter that amount on the 1099 B worksheet it tells me I can't use the code M...attaching summary.  I am thinking I should just adjust the amount of the Cost Basis (or the proceeds?) to reflect that gain so the client pays the tax on it?? 

And.... after filling in the 1099-B worksheet 2 of the grouped entries say BYPASS 8949.  They are coded A and D (basis reported) on the 8949 type...so I assume that means the IRS doesn't need to see it on form 8949.  BTW...the wash sale is on the code A (short term reported). 

And this is the first stock sales I have had this year.  It took me forever to figure out the new format for adding them in ProSeries....just sayin!

 

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13 Replies 13
IRonMaN
Level 15

I don't think you want to adjust the cost basis, but you might want to list that individual transaction.


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Yeah...I thought about that and removing the amounts from the group.  I just didn't want the IRS to include that in the group or get confused.  OH HELL, why can't this be easy???  I would list them all but there must be 50 or 60 different transactions. 

IRonMaN
Level 15

"the IRS to include that in the group or get confused"

The IRS never gets confused 🤣😂🤣


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Just-Lisa-Now-
Level 15
Level 15

I just stick the wash sale adjustment in the wash sale box, I dont give it any codes

 


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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maxie
Level 3

@Just-Lisa-Now- wrote:

I just stick the wash sale adjustment in the wash sale box, I dont give it any codes

 


If you are trying to enter the summary total,  are you listing it in the "quick entry table" or in the Form 8949 reporting exceptions transactions area?  There is no where (that I can find) to list the wash sale if you put in the reporting exceptions area. It just has Proceeds box and Cost Basis box.  

I know how to do this in 2019 Proseries but I cannot find it in 2020 Proseries. 

 

 

 

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maxie
Level 3

I have an almost identical situation. I have 68 transactions, two have wash sales and I'm not going to enter them individually. I can accomplish what I want to do in Proseries 2019 but Proseries 2020 has me completely confused and wasting valuable time. 

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Just-Lisa-Now-
Level 15
Level 15

This is what I do

1099BWASH.png


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Yes Lisa you can do that but if you are attaching the details from the 1099-B so you don't have to put in 70 transactions then the program won't let you do that.  What I did was the the wash sale in the other adjustment column and coded it M (for the attachment) and O (for other adjustment) then I added a note printed with the return saying it was the disallowed wash sale.  That adjusted the capital gains to the correct amount.  We will see what happens with the IRS....   😟

Utah, thank you for this!!  I've been trying to figure this stupid issue out.  I never looked closely enough at the error code when I put an amount in the "wash sale" box because if you read all the way to the end, it does say "Remover the disallowed wash sale amount and include the adjustment here...".  So your method is correct, apparently.  Whew!

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Maxie...see what I did in my reply to Lisa.  It worked now lets see it the IRS thinks it works.

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maxie
Level 3

@utah-arizona-taxlady wrote:

Maxie...see what I did in my reply to Lisa.  It worked now lets see it the IRS thinks it works.


I'm assuming you enter in one line for the total short term. What do you put for the sale date if you have multiple dates? The program won't allow you to use "various" for the sale date. Do you use the earliest one or do you have to enter them by sale date?  

Why am I so confused? I did this multiple times last year with the 2019 program.

If you are attaching the details choose the Code M first and the short or long terms then add the totals for that.  It was a few days ago I did it...or maybe it was yesterday and just seemed like a few days ago...but the dates are greyed out if I remember correctly.  The IRS will get all the dates and details off the attached PDF of the detailed 1099-B.  Hope this helps and I am remembering it correctly.  It has been a long few days.  My wine is waiting for me patiently.  🤓🍷

KCash77
Level 3

I am preparing a Form 1041 and on the Schedule D there is a Exception Smart Worksheet. I entered all the info I needed to and it has a place for as many single letter codes that apply. I entered Short Term, then Long Term, separately, but I guess they can be entered as one transaction. I put Code M in the Short Term, Code MW in the Long Term. I didn't see this Smart Worksheet for Form 1040 though. Hope this helps and hope I did it correctly.

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