1099B with Wash Sales

[Randall]

Client went crazy trading in his account.  1099B has lots of wash sales.  Disallowing these losses produces a gain of $28k.  Just a paper gain.  I know it's his own fault.  But when looking at the individual transactions, I'm wondering if the previous loss is added to the basis of the next transaction.  I really can't second guess the 1099B but I'm wondering if these are accurate.  Anyone have any experience with this?  The 1099B is from TD Ameritrade.

 

[JackieCPA]

The disallowed loss from a wash-sale is added to the basis of the replacement security. When it is sold, the disallowed loss effectively reduces the gain or increases the loss of that transaction.

[BulldogTom]

1 hour ago, Randall said:

Client went crazy trading in his account.  1099B has lots of wash sales.  Disallowing these losses produces a gain of $28k.  Just a paper gain.  I know it's his own fault.  But when looking at the individual transactions, I'm wondering if the previous loss is added to the basis of the next transaction.  I really can't second guess the 1099B but I'm wondering if these are accurate.  Anyone have any experience with this?  The 1099B is from TD Ameritrade.

 

Had the same thing for a client this year, but a much bigger number.   I had the same thought.   We went through the statements from Schwab and the basis is correct for the 2019 wash sales sold in 2020.

Tom
Modesto, CA

[Randall]

32 minutes ago, BulldogTom said:

Had the same thing for a client this year, but a much bigger number.   I had the same thought.   We went through the statements from Schwab and the basis is correct for the 2019 wash sales sold in 2020.

Tom
Modesto, CA

Thanks Tom.  I've asked him to get me his account statements for January & February, 2021 to take a look.

[BrewTax]

Had a very active trading client and asked him to check with TDAmeritrade--they do track wash sales and incorporate that into client basis.