About Substantially Identical Wash Sale Adjustments

The Book Wash Sale Adjustment panel allows you to manually add a substantially identical wash sale adjustment. A substantially identical wash sale adjustment allows you to perform manual wash sales processing that treats as substantially identical securities those securities that have the same SEDOL or CUSIP identifier or are manually linked. Eagle Accounting's automated wash sale processing does not currently manage substantially identical securities. You can perform manual wash sales processing to subject trades for these securities to wash sales treatment, including all underlying securities. These securities may have different processing security types, local currencies, quantity scales, and price divisors. For quantity scale differences, the reference data must be set to clearly identify the quantity relationship.

A substantially identical wash sale adjustment let you disallow a loss from a lot in one security to a lot or lots in a different security. You can select the replacement shares yourself or can have the system determine the replacement shares. A substantially identical wash sale adjustment creates offsetting adjustments across different positions, a loss disallowance against a close of one position, and a cost update against an open lot of a different position.

The system uses the value in the Manual Wash Sale Type field on the Book Wash Sale Adjustment panel to identify the type of wash sale adjustment you are adding.

To add a substantially identical wash sale adjustment, identify the entity, identify the close lot you are adjusting and set the Manual Wash Sale Type field (tag 157) to a value of Substantially Identical Wash Sale. The system displays additional fields that allow you to identify the close security and lot to indicate where the loss was generated, identify the substantially identical security, and specify how to identify the lots opened where the disallowance is going. You can set the Washsale Open Lot Flag field (tag 4916) to a value of User Defined Open to identify the target open lot yourself in the Choose Lot to Change field or can set the field to a value of System Defined to have the system determine the target open or opens for which to disallow the loss.