1099-B Wash Sale Loss with Gain

Forum|Forum|1 year ago
March 4, 2025
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My 1099-B lists a number of line items that have a Wash Sale Loss Disallowed (positive number) with a Gain/Loss (positivie number). Is this ok? I thought a line item indicated as a Wash Sale could not have a positive gain with a Wash Sale Loss Disallowed that also has a positive number.

Example from 1099-B:

Cost Basis = $14,495
Proceeds = $15,476
Wash Sale Loss Disallowed = $54
Gain/Loss = $836

Best answer by DavidD66

It is not a "Wash Sale"; however, the cost basis of the asset needs to be adjusted to account for a disallowed loss that occurred as a result of the purchase of (some or all) of the asset. It is the purchase of an asset that causes the loss on the sale of a similar asset to be disallowed. What happens to the disallowed loss? It does not disappear. It attaches itself to the newly purchased asset as an adjustment to the cost basis. The adjustment is inverse (opposite) of the original Wash Sale adjustment. Stop thinking about it as a Wash Sale with a gain. It is the sale of stock at a gain with an adjustment (a reduction) to the cost basis. The adjustment is a Wash Sale adjustment, but the transaction is not a Wash Sale.

DavidD66

Based on the example you posted above, it looks to me like the Wash Sale Loss Disallowed, was disallowed on the previous transaction that resulted in a loss. The current transaction is the sale of the asset purchased that caused the Wash Sale adjustment. The disallowed loss is now allowed and is reducing the gain on the current transaction. You don't lose your losses due to wash sale adjustments, they are just suspended until you dispose of the asset.

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batoms1

David,

A clarification on my reply above.... I guess what I am trying to figure out is should this line item be refelected as a wash sale if it is showing a gain. If it should be reflected as a wash sale, there shouldn't be a gain. That's what I'm struggling with... how to represent this line item accurately.

DavidD66Answer

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batoms1

Thanks David. You are correct in stating the current transaction is the sale of the asset purchased that caused the Wash Sale adjustment. That being the case, does that mean the cost basis of the sale should be adjusted to add $54 to it? Or do I add an "Adjustment Amount" of -$54?

Example from 1099-B: