Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
robmjoseph
New Member

A negative amount on my closed out short sales of options contracts in the sales proceeds field is causing a review. Can I still submit since it is correct?

In the review I get a message stating that "Sales price is not between the prescribed upper and lower limits." However, this is the way in which the IRS requires reporting to be done. Only net amounts are reported. If the short option was covered for a profit, then the profit is reported as the sales proceeds and gain. If there is a loss, then a loss is reported as the sales proceeds and loss with a negative sign. A negative sign is allowed in the loss column, but causes the review in the Sales Proceeds column.
4 Replies
ColeenD3
Expert Alumni

A negative amount on my closed out short sales of options contracts in the sales proceeds field is causing a review. Can I still submit since it is correct?

If you imported your options transactions from brokers and you got an error stating that the values are not between prescribed limits, then that means there is a negative number being reported by the broker.  The IRS will reject the return if it gets that far. 

 

TT is flagging the error and not allowing it to be filed.  Here is an answer that may give some guidance:

 

There has been a change by the IRS starting with the 2020 tax returns that will reject any return filed with a negative number reported in the proceeds or cost basis fields for Schedule D. TurboTax is flagging these situations ahead of time before the return is filed in order to prevent the IRS rejection. Some brokers are still using the old convention for reporting negative values and have not updated their reports to match the IRS.  

 

The error message reported by TurboTax is telling you that the number entered cannot be negative.

 

Gains from expired options are reported by entering the gain amount in the proceeds column and no amount in the cost basis column. The end result here would be positive. 

 

 Losses from expired options are reported by entering the loss amount in the cost basis column and no amount in the proceeds column. The end result here would be negative. 

 

 No negative numbers should be entered in either the cost basis or proceeds fields.  

 

If negative numbers have been imported through your brokerage statement, you will need to edit the entries to make the correction.

 

 

IRS schedule D instructions Sch D. On page 6, it describes how to report options sales. The take away is that gains from expired options are reported with the gain amount in the proceeds column and no amount in the cost basis column, while losses from expired options are reported with the loss amount in the cost basis column and no amount in the proceeds column.

 

 No negatives should ever be used in either columns. The use of negative proceeds was a very old reporting regime that the IRS accommodated until Ty20. For ty20, they've updated the schema to disallow negative values for proceeds or basis. Any brokers still reporting negative values for proceeds or basis need to updated their reporting schema to match the IRS'.

 

 

jj466
Level 1

A negative amount on my closed out short sales of options contracts in the sales proceeds field is causing a review. Can I still submit since it is correct?

THank you for your information.  Makes sense.  I have this exact issue.  I sell calls against long stock positions so yes they are showing up as a negative number.   I will be calling TD Ameritrade - why are the brokerages not up to date on these tax changes?  My hope is they are busy re-adjusting 1099 forms.

jj466
Level 1

A negative amount on my closed out short sales of options contracts in the sales proceeds field is causing a review. Can I still submit since it is correct?

to clarify this - am I to simply change each negative number to a positive number?  That is the only fix needed?

AnnetteB6
Employee Tax Expert

A negative amount on my closed out short sales of options contracts in the sales proceeds field is causing a review. Can I still submit since it is correct?

Please take a look at the information in the TurboTax article below.  There are three options to take care of this situation.  The article will describe each one in detail including any action you may need to take.

 

How do I fix my 1099-B negative values?

 

@jj466

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.61m
Discussions

Manage cookies
v