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Category: General Questions

How do I enter a Wash Sale with TaxSlayer?

A wash sale occurs when you sell or trade stock or securities (including a contract or option to acquire or sell stock or securities) at a loss and, within 30 days before or after the sale, you:

  1. Buy substantially identical stock or securities,
  2. Acquire substantially identical stock or securities in a fully taxable trade, or
  3. Acquire a contract or option to buy substantially identical stock or securities, or
  4. Acquire substantially identical stock for your individual retirement account (IRA) or Roth IRA.

Please Note: You cannot deduct losses from sales or trades of stock or securities in a wash sale.

 

Here is an example of how to enter a wash sale in our program:

Mary purchased Dell stock for $500 on January 1, 2013. She sold the stock for $300 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. 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. Report this Wash Sale as follows:

First Entry
Description of Property: Dell Stock
Date Acquired: 01/01/2013
Date Sold: 5/5
Sales Price: 300
Cost: 500

Second Entry
Description of Property: Wash Sale
Date Acquired: 01/01/2013
Date Sold: 5/5
Sales Price: 500
Cost: 300

*If your loss was disallowed because of the wash sale rules, add the disallowed loss to the cost of the new stock or securities (except in (4) above). The result is your basis in the new stock or securities. This adjustment postpones the loss deduction until the disposition of the new stock or securities. Your holding period for the new stock or securities includes the holding period of the stock or securities sold.

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