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This is the 1099 that I got from my broker. According to them, I lost about $9178 enter image description here

However, when I imported that 1099 file into Turbotax, it said that I actually earned $2562.

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This is very confusing. I don't know if I actually made money from trading stock or if I lost money.

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  • Did your broker provide an 8949 tax form as well?
    – Bob Baerker
    Mar 11, 2021 at 11:27
  • Hi, when I go to the tax section of the website, I only see one form: 1099 Consolidated
    – slllllllls
    Mar 11, 2021 at 15:30

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That $11,740.00 under the wash sale loss disallowed column is the difference between the $9178 loss you were expecting to put on your tax form, and the $2562 in gain that your were able to put on your tax form.

That number means that at the end of the year you still had open positions where you purchased replacement stock within 30 days before or after you sold shares of that same stock for a loss.

When you close those positions in 2021, without buying a replacement set of shares within 30 days, the next tax form will reflect that.

There are two other things to consider. If you made transactions in January 2021, they may have also triggered wash sales because of some December activities, and must be addressed. The second is that if you had multiple brokers, then you may have had other wash sales that an individual broker would not have been aware of.

I am not addressing the issue regarding how much of the capital gain loss you would have been able to deduct from ordinary income, and how much you would have had to carry over.

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  • Your answer may or may not be correct. At one of my brokers, the 1099 form just lists and totals the wash sales. Taken at face value, I'd have a huge tax burden because it 'appears' that I have large carryover wash sales. However, the 8949 form it takes into account closed wash sale positions (no replacement shares purchased within the 60 day window) and correctly adds the adjusted amount back in thereby reduced the capital loss amount. It's of paramount importance for the OP to discern if his 1099 is correct. YMMV depending on the broker's method of reporting.
    – Bob Baerker
    Mar 11, 2021 at 11:27
  • Hello, Thank You for the fast response. So if I understand correctly. The reason Turbotax showed that I gained $2562 is because of this: even though I lossed $9178 in 2020, I still have open positions. And if I close those positions on January 1st 2021, I would have gained $2562 in 2020, instead of losing $9178. Is my understanding correct ? Actually, my biggest concern is that I want to know if I made any money from trading stocks in 2020, I was really shocked to see that I lossed $9178 in 2020. So if I really made $2562 that would be a huge relief.
    – slllllllls
    Mar 11, 2021 at 15:36
  • @slllllllls what you actually gained and what you report as gain or loss are two different things. Usually they are the same but wash sales can change that. It looks like you had realized losses in 2020 (it doesn't show if you have any unrealized gains in open positions) but that you cannot (according to their records) claim 11.7k of losses in 2020 (they are deferred until you close your positions) because of wash sale rules. Honestly I'd go to a local tax preparer who can look at all of the details and determine what losses you can actually claim.
    – D Stanley
    Mar 11, 2021 at 16:25
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If you incurred realized losses and you bought replacement shares within 30 days before or 30 days after realizing the loss, the loss must be deferred and added to the cost basis of the replacement shares.

If the replacement share positions are closed before the end of the year in which the loss occurred with no subsequent new wash sale violation within the following 30 days then you get to deduct the losses in the year that they are realized.

If you carry the open positions that have wash sale adjustments into the new year then your tax bill will be higher since your losses are deferred. This is all about how your gains and losses are reported for tax purposes. It does not change what you gains or losses were.

You should be able to look at your trades and determine if you made money or not from your trading.

Read this for more details.

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