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It's the earlier part that causes the problem - the wash sale, not a later sale that includes the wash-adjusted basis.

--Peter


The first transaction that caused the wash sale was properly handled. The cost basis was adjusted by the wash sale amount.
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If you use one of the programs like TurboTax, they can download all of the trade info from your broker, put it all in the right place, and when you e-file avoid many hassles. The main thing is the program wants you to check and verify all of the auto entries.
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I have many many trades. Do i have to include the the worksheet 8949 from the brokerage for all trades with my income tax form?

You will need to include a separate Form 8949 - not the worksheet from your brokerage - for each different type of trade that you have:
(A) Short-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS
(B) Short-term transactions reported on Form(s) 1099-B showing basis wasn’t reported to the IRS
(C) Short-term transactions not reported to you on Form 1099-B
(D) Long-term transactions reported on Form(s) 1099-B showing basis was reported to the IRS
(E) Long-term transactions reported on Form(s) 1099-B showing basis wasn’t reported to the IRS
(F) Long-term transactions not reported to you on Form 1099-B

These Form 8949s must document all of your trades.

AJ
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Another reason trading is dumb! I'll leave it to my heirs to do the paperwork, I never liked them anyways.

JimA
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I have many many trades. Do i have to include the the worksheet 8949 from the brokerage for all trades with my income tax form?

Maybe. Maybe not.

Take a look at line 1a and 8a of schedule D. If you meet the qualifications for either one of those lines (all of the transactions reported on 1099-B have basis reported AND no adjustments are needed) you don't need to use Form 8949 for those transactions. The big catch for someone with lots of trades is wash sales. If you have wash sales, you can't use this shortcut.

The next best thing is in the instructions for Form 8949, page 3 under Exception 2. The gist is that you can attach a separate statement that includes the same information as Form 8949. Many times, the broker's supplementary additional information will provide what you need. In particular, Interactive Brokers provides a facsimile Form 8949 which makes a perfectly good supplementary statement. Or your broker may allow you to download your sale information into a spreadsheet. If that has everything you need to report, you can use that.

Using this exception, you can electronically file if your software allows you to attach a PDF of the information. Alternatively, you can attach the supplementary information to Form 8453 and mail that after electronically filing.

The ideal situation is to download the details from your broker into your software and just complete the 8949 that way - in all of its gory detail.

I'd encourage you to read the instructions to 8949 and schedule D for these situations.

8949 instructions:
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&...

Schedule D instructions:
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&...

--Peter
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LIke ptheland said, if you use a major tax software and a good brokerage (TTax, Fidelity for me), you will just connect to the brokerage and the software will auto populate the 8949(s) pages for you.

A long time ago I did just download the trades (from the taxable account) into a spreadsheet view as a supplement and then put the appropriate subtotals into the 8949 sheet cells. Now that's all taken care of.
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The big catch for someone with lots of trades is wash sales. If you have wash sales, you can't use this shortcut.

If within the same broker, why? At least Fidelity, handled the small wash sale I had accidently created. They altered the cost basis for both items involved. There was a total for wash sales but that was only slightly confusing informational.
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If within the same broker, why?

Because of the way wash sales are required to be reported by the broker.

On the sale that is affected by the wash, the broker must report the original cost and then separately report the amount of the loss disallowed because of the wash sale rules. That is an adjustment which can only be reported on Form 8949. The shortcut reporting (using totals only on schedule D) is only possible when there are no adjustments.

So - wash sales are an adjustment, and require the use of form 8949.

--Peter
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That is an adjustment which can only be reported on Form 8949. The shortcut reporting (using totals only on schedule D) is only possible when there are no adjustments.

The Consolidated 1099 I received from Fidelity did decrease the cost basis for the wash sale and reported the adjusted basis when those shares were sold.

The summary for covered stock sales were accurate including the wash sale.
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The Consolidated 1099 I received from Fidelity did decrease the cost basis for the wash sale and reported the adjusted basis when those shares were sold.

It's the earlier part that causes the problem - the wash sale, not a later sale that includes the wash-adjusted basis.

--Peter
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No. of Recommendations: 0
It's the earlier part that causes the problem - the wash sale, not a later sale that includes the wash-adjusted basis.

--Peter


The first transaction that caused the wash sale was properly handled. The cost basis was adjusted by the wash sale amount.
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No. of Recommendations: 2
The first transaction that caused the wash sale was properly handled. The cost basis was adjusted by the wash sale amount.

Perhaps I'm not explaining it well. Let me try again.

To have a wash sale, you have a sale of a stock at a loss combined with a repurchase of that same stock. (Lots of potential complications in there, but let's not go down that rabbit hole.)

When that sale is reported, the broker does not adjust the basis. They report the sale proceeds and they report the basis, if required. Then - when they are able to determine a wash sale has happened - they report the disallowed loss in box 1b of the 1099B.

That disallowed loss cannot be adjusted into the basis. It must be reported on Form 8949 as an adjustment with code W. It is this transaction in the series of transactions around wash sales that will keep you from reporting summary totals directly on Schedule D.

Separately, for the repurchased shares which caused the wash sale rules to kick in, the broker will adjust the basis of those shares for the disallowed loss on the previous sale. When those are sold it is possible for that sale to be reported directly on Schedule D when there are no other adjustments.

--Peter
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