Tax Form Questions

[joesxm3]

I had a wash sale where the replacement shares were purchased in my IRA, but the shares sold at a loss were in my taxable account so the broker did not show them as wash sales on my 1099-B.

I have three sections to the report for this account: short term (basis reported to IRS); long term (basis reported to IRS); long term (basis not reported to IRS).

The transactions that are wash sales are in the short term (basis reported to IRS). I think I need to report every transaction from this section, including the wash sale transactions, individually on my form. I would mark the lines for wash sale and enter the rest normally.

The long term (basis reported to IRS) does not have any issues, so I should be able to just enter the summary totals and not list individual transactions.

The long term (basis not reported to IRS) has to have each transaction entered individually and cannot be entered as a summary total.

Does this sound correct?

I guess the main question is whether I can do the short term item by item and then do the long term (basis reported to IRS) as a summary, when both are from the same account.

 

[SecondCor521]

Does this sound correct?

You can certainly do it that way if you want.

What we have been doing at our Tax Aide sites here locally is to enter one summary line for each combination of short/long and basis reporting. We'd also enter adjustment codes of M and W as appropriate.

So for you I'd have three transaction lines on the 8949s:

one line of SHORT VARIOUS A with codes MW
one line of LONG VARIOUS D with code M
one line of LONG VARIOUS E with code M

The M code may result in the IRS requesting detail information later, in which case I would just send in a copy of the 1099-B detail pages. If the totals on your 8949s match your 1099-B, I think the likelihood of this is low.

I guess the main question is whether I can do the short term item by item and then do the long term (basis reported to IRS) as a summary, when both are from the same account.

Yes, you certainly can.

 

[fh2000]

You can certainly do it that way if you want.

What we have been doing at our Tax Aide sites here locally is to enter one summary line for each combination of short/long and basis reporting. We'd also enter adjustment codes of M and W as appropriate.

So for you I'd have three transaction lines on the 8949s:

one line of SHORT VARIOUS A with codes MW
one line of LONG VARIOUS D with code M
one line of LONG VARIOUS E with code M

The M code may result in the IRS requesting detail information later, in which case I would just send in a copy of the 1099-B detail pages. If the totals on your 8949s match your 1099-B, I think the likelihood of this is low.

Yes, you certainly can.

I do not know that you could do summary line. I thought only 'mark to market' trades can be a summary line, because that is what TurboTax asks.

When I download all trades from the brokerages, they always list line by line.
I guess as long as the total matches with 1099-B, it would not matter.

 

[cathy63]

I do not know that you could do summary line. I thought only 'mark to market' trades can be a summary line, because that is what TurboTax asks.

When I download all trades from the brokerages, they always list line by line.
I guess as long as the total matches with 1099-B, it would not matter.

You are allowed to summarize and use code M if you e-file. For paper filing, I think you still have to list each sale. Technically, if you use code M, you are supposed to send form 8453 with the 1099-B details to the IRS office in Austin TX, but the IRS has waived that requirement for their authorized free-file preparers such as Tax-Aide.

 

[joesxm3]

I saw discussions of turbo tax requiring mailing stuff if you e file so I entered it all in line by line. Luckily turbo has some cross checking totals to look at and I caught six misakes.

I had hoped that if I did a lot of taxable trading and wash sales it would be all handled with a summary line but I guess that is not the case.