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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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Recording wash sales on Sched D

Customer Question

I trade a lot of stocks/options, but do not qualify as a day trader, and ALL my trades result in short-term gains/losses. Given that the amount of disallowed loss from a wash sale is added to the basis of the newly purchased security, is it necessary to record any of these wash sale/cost basis adjustments on my Schedule D?   Since they are ALL short term, wouldn''t they all cancel each other out?
Submitted: 9 years ago.
Category: Tax
Expert:  Bill replied 9 years ago.

You still report the wash sale loss on a Schedule D but you enter the loss in parenthesis in column (f) and then write on the line below it in column (a) "Wash Sale" and in column (f) on that line enter the amount of the loss as a positive amount.

See page 56 "How to Report" in center of page -


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Customer: replied 9 years ago.
Sorry...I'm putting this into my Sched D excel spreadsheet and it's not coming out as I'd expect. Where is the cost basis being added back in? I see the spreadsheet is not recognizing the parenthesis...

Well...I'll keep at it. THANKS.
Expert:  Bill replied 9 years ago.

The parenthesis would be entered manually if you were preparing the form by hand. The parenthesis means it is a loss on the first line. See page D-3 of the instructions -