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Because of my wash sale I am having trouble reconciling my…

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because of my wash sale...
because of my wash sale I am having trouble reconciling my income on my balance sheet. where do I enter the rest of the loss from the wash sale. We are talking almost $7000
Submitted: 2 years ago.Category: Finance
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2/29/2016
Financial Professional: PDtax, CPA, MBA replied 2 years ago
PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 5,037
Experience: Tax professional and business consultant for 35 years.
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Hi from Just Answer. I'm PDtax. I can assist.

I like to send the suspended loss to the basis of the replacement shares. An example for $15,000 sale:

Debit investment-new 7000

Cash (sale proceeds) 8000

Credit investment - old 15000

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Financial Professional: PDtax, CPA, MBA replied 2 years ago

Hi from Just Answer. I'm PDtax. I can assist.

I like to send the suspended loss to the basis of the replacement shares. An example for $15,000 sale:

Debit investment-new 7000

Cash (sale proceeds) 8000

Credit investment - old 15000

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Financial Professional: PDtax, CPA, MBA replied 2 years ago

Of course, adjust that entry for your actual transaction.

That way your books reflect the new investment at their tax basis when you eventually sell.

Thanks for asking at Just Answer. Positive feedback using the rating scale below is appreciated. I'm PDtax.

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Customer reply replied 2 years ago
Can you explain a little better. This is not for just one transaction. The total wash sale adjustment is $6797 and includes many transactions (over 100)
Financial Professional: PDtax, CPA, MBA replied 2 years ago

Let's use a single transaction. The idea will translate to many transactions.

2/14 sale of 100 shares for $8,000, your basis 15,000.

2/25 you buy the same shares again for 7,800.

2/14 debit Cash 8000

debit loss on sale 7000

credit investment 15000

2/25 debit investment 7800

debit investment 7000

credit loss on sale 7000

credit cash 7800

After the second entry, the new investment has the correct tax basis, and the earlier loss is no longer reported.

You might need to do this for all the transactions that are wash sales, to determine the tax gain/loss and tax basis of the investments.

PDtax

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Customer reply replied 2 years ago
here is my issue. Account started with 24363 in January and ended with 16370 in December. proceeds $429916.27 cost basis $436645.68 Adjustments for wash sale are $6797.28. because of the adjustment it shows my investment income as $67.87 instead of -$6729.41. Then when I am doing the balance sheet portion in Turbo Tax I can't get the income reconciliation to balance. I realize there are some other amounts missing, but those I can figure out. It is this wash sale that is screwing me up. Thanks
Financial Professional: PDtax, CPA, MBA replied 2 years ago

I'm not sure what you want me to do for you.

I answered your original question, but you are trying to use the quickbooks to turbotax data transfer to do this.

I would try to override all of these transactions myself, by entering the amounts manually and attaching a pdf of your brokerage statement that shows their gain/loss calculation with the wash sales.

Trying to fix the entries remotely would cost you hundreds of dollars, and be difficult to do remotely. Take a tip from an old time preparer, and just do it my way if you can.

Thanks again. Please rate my assistance to close out your question. I'm PDtax.

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Customer reply replied 2 years ago
I only have one brokerage account. I am entering this manually as a summary transaction directly from the 1099-B. I am just trying to figure out where to put the rest of the loss from trading so that my balance sheet balances.
Financial Professional: PDtax, CPA, MBA replied 2 years ago

I would put it as an asset on my balance sheet, call it "suspended loss" or similar. It is a plug figure to make your balance sheet balance. Next year, when the suspended losses are likely recognized, write it off as a book to tax adjustment on next year's return.

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Financial Professional: PDtax, CPA, MBA replied 2 years ago

Is there anything else you need? If this covers things, I would appreciate a positive rating, as I am trying to close out questions for month's end.

PDtax

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