How Do I Report Wash Sales ?

Prior to tax year 2011, each wash sale was reported on Schedule D using 2 rows, first a standard capital loss trade followed immediately by the wash row to offset the disallowed amount.

Beginning in tax year 2011, the IRS introduced Form 8949 to be used in conjunction with Schedule D, and changed how wash sales are reported.

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Now, each wash sale is reported on a single line on Form 8949. There are new columns for an adjustment code and the amount of disallowed loss.


Example: sold 100 ABC at $400 loss, repurchased stock 3 weeks later

(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
Description	Bought	Sold	Proceeds	Cost Basis	Codes	Adj.	Gain
100 ABC	01-10-2014	08-25-2014	$4,800	$5,200	W	$400	$0

The disallowed loss amount is added to the cost basis of the purchase which activated the wash sale rule.

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