TNL US Tax Thread 2012

[Tones]

I'm pretty happy that I grew up in the age of TurboTax. No paper to mess with and mail, no taxman to see; I can do my taxes at midnight on Saturday, because that's when I have time to. Excellent.

[GohanX]

True, I think I did my taxes the hard way only once in my first year of work. Yay technology!

I have been known to do my state taxes by hand, as the various websites like to charge very little for federal taxes, and a ton to import the data into state taxes. Last time I did it, NC tax forms were all auto fill PDFs, it's great for simple returns.

[mollipen]

Was excited going into doing my taxes tonight, thinking I'd get back at least like $1500 or so. End up finding out I'm going to owe almost $1000. *sigh*

[dog$]

That's a pretty big swing. What changed from last year for you?

[Opaque]

I did my taxes in like two hours and got back $1300.

I do not look forward to having more complicated taxes when I'm married/have kids/make adult money.

[Mman]

Wound up owing a couple hundred dollars again this year. That is what I get from making shit for all to just shit.

[Diff-chan]

Dog, what is a wash sale? What does that indicator mean on the 1099-b? I'm doing my GF's taxes and that shit is required for investments. It's confusing as hell.

Does it matter if the stock is sold for a gain , or is a non covered security?

[dog$]

Wash sales are rules put in place to forestall the accounting of losses when you sell and immediately repurchase the same property, and are meant to prevent abuse of loss deductibility.

On January 20, you have stock that you spent $12000 to acquire on January 1. It's worth $10000 on January 20. Without the rule, you could sell the stock at $10000 and immediately repurchase it at $10000, thus allowing you to report a $2000 loss to your income and still retain the $10000 stock. With the rule, that $2000 loss is added to the $10000 basis of the new purchase, which puts your adjusted basis of the $10000 stock back to $12000.

I've attached an 8949 to expand on this example and what would happen if you sold the newly acquired stock at a loss later in the year, after the 30 day wash sale rule would be invoked.

When you report a Wash Sale on the 8949, you'll have a separate item to enter whose property is titled "WASH SALE" and the amount from 99B Box 5 will be a positive value that is entered as an adjustment (column (g)) without any sale price or basis (columns (e) and (f) will be blank) nor any date of acquisition or sale. Whenever the newly acquired stock is sold, the column (g) amount you entered is added to the amount you will enter in column (f).

Does it matter if the stock is sold for a gain , or is a non covered security?

The Wash Sale just impacts the basis of the new stock whenever it is subsequently sold, whether it is at a gain or a loss. Wash Sale rules apply alike to covered securities and noncovered securities.

Rules about Wash Sales are on page 4 of the 1040 Schedule D instructions and page 60 of Publication 550.

If you still have an issue, PM me the values you have in the 99Bs and I can look to see how they should be reported.