How do I report stock losses on FreeTaxUSA from meme stocks? The closest I can report on is 1099-DIV

So I jumped on the meme stock train last year and ended up selling at a loss through my Fidelity account. Now I'm trying to do my taxes using FreeTaxUSA and I'm confused about how to report these losses. I also received some dividend income during 2023. I'm looking at the forms in FreeTaxUSA and the closest thing I can find is the 1099-DIV section, but that doesn't seem right for reporting my stock losses. I'm wondering if I should be reporting this as a stock loss carryover? This is my first time dealing with investment losses on my tax return and I really don't want to mess this up. Any help would be greatly appreciated!

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20 comments

Zane Gray

•8M

Stock losses should be reported on Schedule D using information from Form 1099-B, not 1099-DIV. The 1099-DIV is only for dividend income, while 1099-B covers proceeds from stock sales. In FreeTaxUSA, you need to enter your stock transactions under the "Income" section, then look for "Investments" and select "Stocks, Bonds, etc." This will lead you to where you can enter your 1099-B information from Fidelity, including both the purchase price (basis) and the selling price. Your meme stock losses will be used to offset any capital gains you might have, and if your total losses exceed your gains, you can deduct up to $3,000 against your ordinary income. Any remaining losses above $3,000 would then become a "capital loss carryover" to future tax years.

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Zane Gray

•8M

If Fidelity didn't send you a 1099-B, check your online account first - many brokers only provide electronic copies now. Look for tax documents in your account settings or statements section. Even without a formal 1099-B, you can still enter your stock transactions in FreeTaxUSA. When you go to the "Stocks, Bonds, etc." section, there's an option to manually enter transactions. You'll need to input the stock name, purchase date, purchase price, sale date, and sale proceeds. This information should all be available on your annual statement or transaction history.

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Alejandro Castro

•8M

After struggling with almost the exact same situation (lost my shirt on AMC, lol), I discovered taxr.ai at https://taxr.ai and it made figuring out how to report my stock losses SO much easier. I was completely lost trying to navigate FreeTaxUSA's interface for reporting my trading losses. The tool actually analyzed my Fidelity statements and automatically extracted all my stock transactions - purchase dates, sale dates, basis amounts, everything. It then guided me through exactly where to enter each piece of information in FreeTaxUSA. Saved me hours of frustration and googling tax codes.

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Alejandro Castro

•8M

Yes, it works with pretty much all the major brokers! I've seen people use it with Robinhood, TD Ameritrade, E*TRADE, Webull, and others. It can handle multiple accounts too, which is super helpful if you're trading across different platforms. The security is actually really good - they use bank-level encryption and don't store your documents after processing. As for FreeTaxUSA specifically, it gives you step-by-step guidance for several tax platforms including FreeTaxUSA, TurboTax, H&R Block, and others. It shows you exactly which screens to navigate to and what to enter where.

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Jackie Martinez

•8M

I was skeptical at first about using taxr.ai, but after struggling for hours trying to figure out how to enter my numerous crypto and stock transactions in FreeTaxUSA, I decided to give it a try. Holy cow, what a difference! The tool extracted all my transactions from my statements, calculated my gains/losses correctly, and showed me exactly where to enter everything in FreeTaxUSA. What really impressed me was how it handled my wash sales that I didn't even realize I had. It flagged them automatically and explained how they affected my deductible losses. Definitely using this again next year since I'm still trading (though staying away from meme stocks after getting burned).

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Lia Quinn

•8M

If you're having trouble getting through to the IRS for help with how to properly report stock losses (I was on hold for HOURS), I'd recommend using Claimyr at https://claimyr.com to get through to an agent quickly. They have a service that basically holds your place in line and calls you when an IRS agent is about to pick up. You can see how it works at https://youtu.be/_kiP6q8DX5c I was initially going to try figuring out the stock loss reporting myself but had some complicated wash sale situations. The IRS agent I spoke to was actually super helpful and walked me through exactly where to report everything in FreeTaxUSA. Worth every penny not to wait on hold for 3+ hours.

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Lia Quinn

•8M

It's not magic - they use an automated system that continually calls the IRS using their phone tree navigation expertise, basically holding your place in line. When they're about to connect with an agent, you get a call and they connect you. They don't just keep calling randomly. They have sophisticated software that navigates the IRS phone trees and stays on hold so you don't have to. It's basically like having someone wait in a physical line for you. When you're close to the front, they call you to take your place. It's simple but effective, and definitely not a scam - I was just as skeptical as you before trying it.

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Asher Levin

•8M

I've got to eat my words here. After my skeptical comment above, I was still desperate to talk to someone at the IRS about my stock loss situation (I had some complicated wash sales from trading the same stocks multiple times). I tried Claimyr as a last resort and... it actually worked! Got a call back about 45 minutes after signing up, and was connected to an IRS agent who helped clear up my confusion about how to report my meme stock disasters in FreeTaxUSA. The agent explained I needed to be in the Capital Gains section, not Dividends, and walked me through reconciling my trades. Saved me from potentially misfiling and facing penalties later.

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Serene Snow

•8M

Quick tip from someone who's been trading and using FreeTaxUSA for years: When you're entering stock losses, make sure you're using the correct cost basis method. FreeTaxUSA defaults to FIFO (First In, First Out) but your broker might be using a different method. Double-check your 1099-B or broker statement to see which method they're using. Also, watch out for wash sales! If you sold at a loss and then bought the same or "substantially identical" stock within 30 days before or after the sale, you can't claim that loss immediately. FreeTaxUSA should handle this if you enter all your transactions correctly.

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Serene Snow

•8M

FreeTaxUSA doesn't automatically detect wash sales - you need to identify and mark them correctly when entering your transactions. A wash sale occurs when you sell a stock at a loss and then buy the same or similar stock within 30 days before or after the sale. If your broker is good, your 1099-B should already have wash sales marked with a "W" code and the loss amount that was disallowed. When entering these in FreeTaxUSA, there's a checkbox for "Wash Sale" where you can enter the disallowed amount. If you're not sure, look at your trading history and check if you bought shares of the same company within that 61-day window centered on your sale date.

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Alana Willis

•8M

For anyone still struggling with this, I recorded a quick walkthrough of how to enter stock transactions in FreeTaxUSA: 1. Go to the Federal section 2. Click on Income 3. Scroll down to "Investments" 4. Select "Stocks, Bonds, etc. (Schedule D and Form 8949)" 5. Choose the correct Form 8949 type (usually Box A or B for most brokerage accounts) 6. Enter each transaction individually For meme stock losses specifically, make sure you're tracking your basis correctly. If you bought in multiple batches at different prices, each purchase needs to be tracked separately. Good luck to everyone dealing with their losing meme stocks! At least the tax deduction takes some of the sting out...

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