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Step 1
Obtain Schedule D from the IRS. A downloadable and electronically fileable form is available at www.irs.gov/pub/irs-pdf/f1040sd.pdf
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Step 2
Determine if the wash sale is a short-term trade or a long-term trade. If the position has been held for less than one year, it is a short-term trade. If the position has been held longer than one year, it is a long-term trade.
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Step 3
Review trade records to determine the name of the security, the date acquired, the date sold, the sale price and the basis.
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Step 4
Calculate the capital gain or capital loss by subtracting the basis from the sales price.
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Step 5
Enter the trade on line 1 of Schedule D in the case of a short-term capital gain or loss, or on line 8 of Schedule D in the case of a long-term capital gain or loss. Enter the full amount of the loss in column F. Do not account for the wash sale on this line.
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Step 6
Enter the words "Wash Sale" in column A (Description of Property) directly beneath the trade that was entered in step 3.
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Step 7
Enter the amount of loss that is disallowed as a wash sale in column F as a positive number.
