Error about Schedule D line 16. Exceeded maximum noncovered sales.

Forum|Forum|2 years ago
August 2, 2023
2 replies
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Hello,

I am getting the error:

Schedule 😧 Line 16 does not include capital asset sales because you have exceeded the maximum number of noncovered sales. Since you have more than 4000 noncovered sales, you wil need to remove some of the noncovered sales. They can be replaced by entering a summary and attaching a statement to your return with the individual sale details.

I have close to 10,000 cryptocurrency transactions as well as stock trades.

My return is blank for anything capital gains related when I preview/save it. What is the correct step to fix this.

I am showing a ton of Capital Asset Sales Wksht instead of a 8949 I think.

How can I fix this?

fanfare

Employee

devise a new arrangement for aggregating your crypto activity to reduce the number of transactions.

one possibility -

twelve transactions that summarize the cost proceeds and gain loss by month.

four transactions that summarize the cost proceeds and gain loss by quarter.

@bobdobalina

bobdobalinaAuthor

I have an aggregated version that lumps all the gains/losses together

for example it shows 2 short term ETH trades

one that is a large negative number for all the losses

one that is a large positive for all the gains.

If I use this don't I need to note or physically mail in the full transactions?

fanfare

Employee

Only SELL transactions have to be detailed on Form 8949 with Box C or Box F checked.

I suggest you prepare a PDF file of your details and have it available when you e-File.

Use tax software that accepts and attaches a PDF file when you e-File Schedule D with a summary.

I don't know if TurboTax is going to work for you to comply with the IRS detail reporting requirements when you have so many transactions that TurboTax will not support that.

Other tax software will handle a PDF file of your details.

---

my original suggestion was to not report strictly correct, and hope for leniency from the IRS.

@bobdobalina

Mike9241

covered transactions with no adjustments can be reported as just a total on schedule D line 1a (short-term - type A) and/or 8a (long-term - Type D)

Types B, C, E, F, X and Types A and D with adjustments can be entered as single line items (use code M) on form 8949, or you can report all trades on the 8949 with totals by type. this will enable you to e-file.

what is then required is to mail in Form 8453 and attach details of the trades by type as reported on the 8949. Using code M will automatically check the proper box on the form

https://www.irs.gov/pub/irs-pdf/f8453.pdf

read the instructions as to when and where to file.

bobdobalinaAuthor

How can I manually enter code M for the trades it aggregated.

For example all of my ETH trades are aggregated into one loss, but turbotax only lets me change it to "see attached summary" instead of letting me just check code M. I went to forms and overrode but it just adds a new blank line with code M instead of letting me add it to that line.