Disallowed Wash Sales over Two Submitted Brokerages

Forum|Forum|3 years ago
February 18, 2023
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Hello, I have a few questions. I have uploaded two different brokerage 1099 forms to Turbo Tax. I have Disallowed Wash Sales on both, however because I sold all the securities relating to those in early November od 2022 I believe they are not factored into my Net Gain/Loss and so far Turbo Tax is reflecting that in the totals.

However, I may also have Disallowed Wash Sales because of crossover buys and sells from the two brokerages as well because I bought a security at a loss and repurchased it in the other brokerage within 30 days. Again though, all these securities have been sold in early November 2022. My question is do I need to concern myself with these possible crossover wash sales and does Turbo Tax catch these on the 8949 from that has all the transactions when the 1099 forms from the brokerages are uploaded? Will the IRS even concern themselves with these? I have ton of transactions and am hopeful I don't need to go through this and report any crossover wash sales. It does not seem like it would matter.

Best answer by JohnB5677

If you sold 100% of all of your holdings in the underlying Wash Sale stock in November, you should be Okay regardless of what broker you used. The reported Wash Sales are not recorded directly on your tax return. Instead, the cost basis of the underlying stock is increased. The result is that when you finally sell the underlying stock it will be a bigger loss or a smaller gain.

Provided all of the stock was sold in November, you will not have to be concerned with figuring out the cost basis between multiple brokers.

A wash sale occurs when an investor closes out a position at a loss and buys the same security (or a substantially similar one) within the 61-day wash sale period. Wash sale rules are designed to prevent investors from creating a deductible loss for the purpose of offsetting gains with only a short interruption in owning the security.

Mike9241

crossover wash sales - maybe. wash sales can convert short-term items to long-term because holding periods tack on from the shares sold to the shares acquired that caused the wash sale. the other issue is if you transfer securities from one broker to another they are using the proper tax basis. sometimes they will use the value on the date of the transfer as the tax basis which would be wrong in about 100% of those cases.

PJhikerAuthor

I never transferred holdings to another brokerage. I just probably have about 5 wash sales that are caused from buying a Security at a loss in one brokerage and then repurchasing it in another brokerage. I would think because I sold all these securities prior to the end of the year in November I am good? I know because I sold them the disallowed wash sales are realized as legit losses for the year and I think what I'm asking is because of that don't the crossover wash sales become realized and as a result mean I don't really need to worry about manually figuring them out and reporting them to the IRS since the realized Gain/Loss would be the same either way?