A wash sale occurs when you sell or otherwise dispose of stock or securities (including a contract or option to acquire or sell stock or securities) at a loss and, within the 30 days before or after the sale or disposition, you:
- Buy substantially identical stock or securities,
- Acquire substantially identical stock or securities in a fully taxable trade,
- Enter into a contract or option to acquire substantially identical stock or securities, or
- Acquire substantially identical stock or securities for your individual retirement arrangement (IRA) or Roth IRA.
A loss from a wash sale cannot be deducted on the tax return unless the loss was incurred in the ordinary course of business as a dealer in stock or securities.
To enter a wash sale on Schedule D in the tax program, from the Main Menu of the Tax Return (Form 1040), select:
- Income Menu
- Capital Gain/Loss (Sch D)
- Select New and enter all information on the data entry screen, Select OK
- Select Adjustment Code
- Select Nondeductible Loss from a Wash Sale, Select OK
- Select Adjustment to Gain/Loss
- Adjust the Gain/Loss to $0
- This will carry the Wash Sale to Schedule D and Form 8949
Note: This is a guide to entering a wash sale into the TaxSlayer Pro program. This is not intended as tax advice. For additional information refer to the Additional Information below.