PA state - Wash sales and Pension

Forum|Forum|2 years ago
April 12, 2024
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Wash sale example - proceeds 152, cost basis 161 (1g) Wash sale disallowed 8. Now on the PA tax form it is strictly 152 and 161. The Wash Sale in this example 8 is not included for PA. Therefore I can claim the loss of 8 for PA State. Is this correct?

Also, I added my 1099 R form in the federal. It carried over into PA state. The 1099R does not show any PA state tax. It appears it is being taxed on my PA state form. I didn't think PA taxes your pension?( It was an early retirement, does this matter)?

DianeW777

Yes, you are exactly correct in your understanding between the wash sale rules for IRS and Pennsylvania (PA). Keep in mind you must track this cost basis for federal and remember you no longer have a cost basis to use for this wash sale when you do your PA return next year.

Again you are correct, that pensions when taken at retirement are not taxable. You must make the correct selection in your PA return when you reach the screen 'What kind of retirement income do you have from Pennsylvania?'. Select the dropdown and choose 'I'm eligible, plan's eligible (no PA tax)' (see the image below).

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@DianeW777

cc: @Nicki9

Based on your answer, since the adjusted cost basis on the triggering transaction is not marked as an adjustment, nor associated with the wash sale on 1099-B,

you will get to subtract that disallowed loss twice on your PA tax return.