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I bought gm stock multiple times, and sold them together and had a very small gain, but the 1099b reported it as a wash sale, do I have to file it that way?

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June 1, 2019
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I thought I was cost averaging and selling for a gain, does that have to be considered a wash sale?

TurboTax Premier Windows

Best answer by TomYoung

"Cost averaging" is a strategy for buying a stock whereby you invest the same amount of money with each purchase and the purchases occur on a regular schedule. But you can't use "average cost" when you sell a stock. There are various permitted methods for determining cost and unless you tell your broker the method you want to use before the trade settles, First In, First Out, (FIFO) is the typical default.

What might have happened here is that you - mentally - were using average cost when you sold and thinking you had a gain but the broker used FIFO and computed a loss. Then within 30 +/- days of your sale at a loss you made one or your "regularly scheduled" buys. That combination of events would result in a wash sale loss.

Enter the 1099-B exactly as it reads, wash sale loss information (Box 5) and all. The broker, behind the scenes will adjust the cost basis of the shares you own appropriately.

Tom Young

T

TomYoungAnswer

Employee

"Cost averaging" is a strategy for buying a stock whereby you invest the same amount of money with each purchase and the purchases occur on a regular schedule. But you can't use "average cost" when you sell a stock. There are various permitted methods for determining cost and unless you tell your broker the method you want to use before the trade settles, First In, First Out, (FIFO) is the typical default.

What might have happened here is that you - mentally - were using average cost when you sold and thinking you had a gain but the broker used FIFO and computed a loss. Then within 30 +/- days of your sale at a loss you made one or your "regularly scheduled" buys. That combination of events would result in a wash sale loss.

Enter the 1099-B exactly as it reads, wash sale loss information (Box 5) and all. The broker, behind the scenes will adjust the cost basis of the shares you own appropriately.

Tom Young