Wash Sales

johnnypkg Member ✭✭
edited January 24 in Investing (Windows)
does anyone know a work around for wash sales....I can't reconcile my capital gains with my broker because of so called wash sales so it's screwing me up for two years


  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    AFAIK Quicken does not have any provisions for tracking wash sales, but perhaps this discussion will be helpful
    QWin Premier subscription
  • johnnypkg
    johnnypkg Member ✭✭
    thanks Jim....but it's kind of screwed up especially with active day traders...it screws up the previous year as well as the current year making the capital gains report/feature useless.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    So you have a sale of a security at a loss and, within 30 days of (before or after) the sale, the purchase of the (substantially) same security.  You want to adjust your Quicken records to a) not show the actual loss on the sale (should be no loss, no gain) and b) show the basis of the recently purchased shares as increased by that loss.

    Example:  On day 1, sold 100 shares of XYZ at $9/share for a $100 capital loss.  Next day bought 100 shares of XYZ at $8.50/share.

    What I would do:

    On day 1 (date of real world sale),
    • Remove Shares - XYZ 100 sh (same lot as sold)
    • Add Shares - 100 sh Date acquired = same as lot removed/sold, basis = $9/sh = $900 (same as proceeds of sale).
    • Sold 100 shares XYZ - same lot as just added, proceeds of real-world sale.  
    • Net effect of sale should be no capital gain/loss with correct proceeds received as cash
    On day 2 (date of real world re-acquisition)
    • Buy shares XYZ -- real world transaction -- 100 shares for $850
    • Remove Shares -- that lot just bought
    • Add Shares -- 100 shares XYZ, basis = $950 = real world $850 + wash sale allowance of $100; Acquisition date = as original sold shares (I believe that to be the case, legally)
    Overall, the Remove/Add shares pairings are used to adjust the basis on the sold and acquired lots before the sale and after the acquisition.  The actual Sell and Buy keep the cash correct.  

    While RtrnCap transactions could be used to adjust cost basis, it works only if there was only one lot and the entire lot was sold and bought.  I would not recommend that path.  

    Real world -- this has not occurred frequently enough or in great enough magnitude for me to go to all this trouble.  I have relied on the brokerage to keep their records straight (keeping an eye on their numbers).  I have added Reminder transactions that Wash Sale rules were applied to sale.   
  • johnnypkg
    johnnypkg Member ✭✭
    Thanks Q...and yes I do use my brokers numbers since those are the official numbers we need for the IRS but the issue comes in when you have multiple accounts and actively trade....just a little annoying but not the end of the world
  • GA Hiker
    GA Hiker Member ✭✭
    Yes, thank you q_lurker! I went as you did in "Real World," using the Memo fields of the sell/buy transactions instead of Reminder transactions but loved that idea. I was not aware of Reminder transactions. Handy!
  • schmidtl4
    schmidtl4 Member ✭✭

    @q_lurker - thanks for your post! I followed your approach but there are some quirks to my situation and I'd love your thoughts.
    I sold 300 shares on January 3
    The shares came from 6 different lots. The last one was a partial.
    All of the lots were already "Added" lots as they came from an inheritance
    Following your guide, I remove 300 shares (selecting the particular lots that they should have come from) .
    Then, I add back the 6 lots.
    Then, when I go to sell the lots, I see the original Added transactions and the newly Added transactions.

    Which lots should I specify when completing the third step in your guide? The original "Added" lots or the more recent "Added" lots?
    Your thoughts would be most welcomed!

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭

    If you are referring to this ‘third step’,

    Sold 100 shares XYZ - same lot as just added, proceeds of real-world sale.

    you would be selling the most recent Added Shares with the newly adjusted basis such that this sale has no capital loss.

This discussion has been closed.