TurboTax telling me to mail form 8453 after e-file, but all my asset sales are already in the return.

[lowted]

Hello. Hoping someone can help here.

After (grr) e-filing, TurboTax told me to print and mail form 8453. In the form 8453, it has the final box checked for 8949.

TurboTax just says literally "Print and Mail These Forms to the Government. Even though you e-filed, you're still required to print and mail these forms" -- It doesn't give any information of supplemental forms that need to be attached.

I assume this means it wants me to attach a form 8949 but TurboTax never told me to do that. It just says "print and mail these forms" with no other info and what it has me print is only the 8453 itself. No 8949 form was given to me to print during this step (even though they exist in my return). The "explain this" link in TurboTax just takes you to the general TT support web page.

I have thousands of asset sales and pages of 8949 forms already in my TurboTax return and I assumed it would e-file them since I can see them in "form view" in TurboTax. I don't think I "summarized" anything in listing my asset sales as far as I know (is there a way to check this?).

Am I actually supposed to print all of it out and mail it OR should I do exactly as TurboTax asks and simply print & mail the form it specifically told me to print and mail (just the 8453)?

If I do actually need to attach the 8949 copies, do I just print it straight out of TurboTax form view? This is very confusing I would expect TurboTax to just tell me exactly what I need to print and attach and where to find it.

Thanks in advance for any help.

[JamesG1]

In some cases, taxpayers will receive IRS form 8949's from a provider or provider(s).  Taxpayers will enter the information in summary fashion.  

The IRS form 8949 is then uploaded as a .pdf and electronically filed or IRS form 8949 is mailed with an IRS form 8453 within three business days of receiving the acknowledgement that the IRS has accepted the electronically filed tax return.

If your Federal 1040 tax return has been electronically filed and accepted by the IRS, the IRS will be expecting to receive IRS form 8453.  In your case, the attachment is to be IRS form 8949 or similar documentation.

What information did you use to generate IRS form 8949 / Schedule D Capital Gains and Losses information?  Did you receive IRS form 1099-B information from a broker?  Did you receive this information on paper?  Or did you receive it electronically?  Please clarify.

If your electronically filed tax return is accepted by the IRS, this is probably the information that should be enclosed with IRS form 8453 and mailed to the IRS.

@lowted 

[lowted]

Thanks @JamesG1. So I think I see what it is, on the 8949 there is this check box "Check here if this summarizes multiple sales":


This appears to be what triggers it.

There is no 1099, this is from a .TXF file import from a Crypto Accounting program.

I do have the itemized 8949 and it's over 200 pages long (literally a 200 page pdf of form 8949, several thousand transactions). I also have the same data in CSV/Excel format which could be printed much smaller.

Please advise how I would proceed here?

[AmyC]

Summarized sales  that were reported to the IRS with a basis do not require the 8949. You had sales and the IRS wants more information. Your .csv file may have notations the 1099-B does not have and should be much smaller when printed.

The IRS has the 1099-B from the company so I would recommend the .csv file.

[lowted]

Hi @AmyC -

---

@AmyC wrote:

Summarized sales  that were reported to the IRS with a basis do not require the 8949

...

The IRS has the 1099-B from the company so I would recommend the .csv file.

---

These asset sales were not reported to the IRS and there is no 1099-B associated with them. (aka "Box C" on the 8949). There are too many transactions for TurboTax to import so they are summarized.

[lowted]

Ok so I think this is all figured out. This problem is well summarized in this thread full of users caught in this scenario.  Reading through the comments it becomes clear the user experience that leads to this confusion.

Essentially a normal non-tax-expert user doesn't know the ramifications of summarizing transactions and there is no warning in TurboTax until after e-filing, so people like me and many others that posted in that thread get bit with this. For example, in my case, my TXF import was over the TurboTax import limit so my accounting software summarized the transactions. This is all fine, but the problem is that there is no warning in the software until after you e-file. This means even if you manage to get a working itemized import (splitting imports up) you would need to amend your return!! This is complained about plenty in the above linked thread by several users and seems to be a general "gotcha" that I've also fallen victim too as well. I think Intuit forgets that most people using their software are not tax professionals.

[mby1015]

Had the same problem and this worked for me:  Identify the items that have codes associated with them such as wash sales.  Enter everything else as a summary and these items individually.  Nothing then required to send in.  In your case that would mean not importing at all.

To check:  Enter the items  to be summarized.  Then check the TurboTax message to see if it says you don't have to provide anything else.  Then enter one of the items with codes with all the details.  Again check to see if the TurboTax message says you don't have to provide anything else to the IRS.  If so, enter the rest of them.

[aznkk82]

I'm having the same issue and already filed.
What should I do?

[mby1015]

Don't know the particulars of your case, but it would seem like you have one option of just mailing in the extra paperwork.  What I did use TT to file an amended return.  That resolved everything by itself.

[aznkk82]

I'm using TT Desktop, and i have about 500+ pages to mail. 

I have to summarize some of my transactions and i have wash sale.

[mby1015]

With that many pages you probably have a lot of wash sales.  Might be best to put  together a summary statement instead of entering them individually into TT and filing an amended return.  If your broker provides the information in something besides a pdf file that could be fairly quick to do.  I know you are on a tight clock to resolve this, if you want to keep discussing would probably be best to do it directly.  

[aznkk82]

i had to do a summarize version because the import failed.

Do I have to print out the whole pdf and mail it to the IRS?

[DianeW777]

You can mail the pages as indicated, with Form 8453.  If not, and you choose to amend, then be sure your wash sales are separately stated (this should have been done on your original return).  Below are the wash sale rules and instructions on how to amend your return.

Wash sales cannot be combined into section totals.  They should be entered individually so that you can track your cost basis and know when you are allowed to use the information on a final sale.

Wash Sale Rule Defined:

• A wash sale occurs when an investor sells or trades a security at a loss, and within 30 days before or after, buys another one that is substantially similar.
• It also happens if the individual sells the security at a loss, and their spouse or a company they control buys a substantially similar security within 30 days.
• The wash-sale rule prevents taxpayers from deducting a capital loss on the sale against the capital gain.

Affect on Cost Basis:

• The loss that occurs on a wash sale is added to the cost basis of the shares purchased that created the wash sale.
• When all shares are sold and there is no repurchase, that increased cost basis will be used in full and used to determine gain or loss.

As long as you are tracking the wash sales and are not using them on the tax return when you are not allowed, then you can simply enter the same cost basis as the selling price. This will  reconcile your tax return with your Form 1099-B Proceeds which is what the IRS is comparing.

Be sure to keep good records so that you know when to add those losses for future sales. 

The wash sale disallowed is not added to the net gain/loss rather it is adjusted and suspended so that it does not affect the total gain or loss for any pending wash sales.  The rub is that the broker only knows when a wash sale occurs, not when a wash sale no longer exists. This can spill over between two tax years.  Likewise you can have a wash sale during a tax year, and then fully dispose of the stock in the same year which would eliminate the wash sale rule for the final sale of the same stock. 

It's up to you to know when you no longer have to consider the wash sale rule. 

Example: 

X bought 5 shares of ZZZ stock, at $5 per share, then sold it for $3 per share, however immediately before the original 3 shares were sold, X bought another 5 shares at $5.00 per share.  

     $25 for the first block of shares

       15 is the proceeds creating a $10 loss 

The $10 loss is now added to the cost of the new shares for an overall cost basis of $35.  

Once the second block of shares is sold (5 shares with cost basis of $30) without any repurchase with in the 60 day window (30 days before or 30 days after the sale), and if they are sold at a loss, then no wash sale exists on the sale, and a loss is allowed.

You do not have to enter individual transactions, you can combine the wash sales into one entry, once you decide the transactions that are still open. Then include your statement with the detail.

• How to amend (change or correct) a return already filed?

@aznkk82 

[mby1015]

The summary I was thinking of would have 3  components: (1) the sum of all the short-term trades that did not have wash sale components,  (2) each of the short-term trades individually that had wash sale components and (3) the sum of all the long-term trades.  This should match up with the summary information that was originally filed with TT.  Should be a lot less than 500 pages.  If the broker gives you the information in something that can be imported into a spreadsheet, that should not be a huge task - the wash sale trades should be marked with a code.  If it is only in pdf  format, sometimes that converts to a spreadsheet in a workable fashion.

[aznkk82]

Or can i just print out the full 1099B instead of figuring out the wash sale?