Steps to adjust your CSV file to account for wash sale transactions
If you generated a CSV file from your brokerage that reports wash sales transactions, you will need to make some adjustments before importing your CSV file.
Due to new IRS reporting rules, wash sale transactions are no longer reported as two separate transactions. Previously the entire loss would be reported as one transaction. You would then report a second transaction to offset any wash sale loss disallowed. Starting in 2011, the IRS requires an adjustment code and adjustment amount to be entered in order to indicate a transaction is a wash sale. Wash sale transactions will no longer be reported on two separate transaction lines.
The CSV file you generated may not report the wash sale transaction information in the correct format based upon the IRS changes. Therefore, you may need to adjust the CSV file accordingly.
Here is an example of how a CSV file from your brokerage may report wash sale transaction information (Note: Not all brokerages report transactions in the same format, therefore this example may not be the exact layout of your CSV file from your brokerage. However, your CSV file should have similar column headings):
As you can see, the wash sale adjustment is reported on a separate line. This information will need to be combined with the corresponding loss transaction and reported on one line.
First you will need to determine to which transactions the wash sale adjustments apply. Any wash sale adjustment will apply to a loss transaction reported on the same day with the same description. For full wash sale transactions, the amount of the wash sale adjustment will match the loss amount for the other transaction. In the case of partial wash sale transactions, you will need to match these amounts based upon the close date or date sold.
You will need to add two columns to your CSV file, Wash Sale and Adjustment Amount. After you determine which transaction the wash sale adjustment applies to, you will indicate that transaction as a wash sale by entering “Yes” in the Wash Sale column. You will then enter the amount of the wash sale adjustment in the Adjustment Amount column. Then you will delete the line listing the wash sale adjustment amount.
After making these changes the CSV above would now look as follows:
During the CSV import process you will be able to match these new column headings. When you match the Wash Sale and Adjustment Amount columns during the import process, the TaxACT program will automatically add the adjustment code (W) and adjustment amount when reporting this transaction on Form 8949 per the IRS instructions.
If you are still having issues adjusting your CSV file, you can contact our Taxpayer Support center at support@TaxACTService.com. If you attach your CSV file to the email it will help us provide you with more detailed instructions to adjust your CSV file for import. Enter "CSV file for TaxPayer Support" in the subject line of your email to ensure the quickest response time.