I have discovered that need to file Amended Returns for 2017, 2018 & 2019. 2017 & 2018 must be paper filings, but it appears I can use TTax for 2019 & file electronically. I happen to still have 2017 TurboTax - loaded it up and still able to access the Return filed for 2017.
I was hoping a few of you may have gone through this process.
So my question (actually 2) is the format for the 2017 Amended Return by paper. The ONLY thing that needs to be changed is to adjust the basis for several of my stock transactions - to use the Stepped-up Basis for the stock sale due to the death of my spouse in 2017 (missed that option in 2017).
1) Since I need to file a paper copy for the Amended Return - do need to print and resend the entire Return, or do I just send the 1040X page along with the revised Form 8949 pages (since that is the only thing being changed).
2) Several of the stock sales were reported under Short Term sales - whereas due to the death of my spouse, as I read the rules, it appears that in addition to using a stepped-up basis, all sales are now to be reported as LT Capital Gains. This is going to be a mess because someone, maybe TurboTax, split a lot of my sales in half - filing half of the sales as a ST Gain and the other half as a LT Gain using the date of the death of my spouse as the Acquired Date. The bottom line being, the reporting of the stock sales is ALL SCREWED UP (yes, I should have caught that in 2017, but trusted my Brokerages and TurboTax too much when I filed my 2017 Return to go through every stock transaction individually).
Anyway, should I try to correct each individual entry filed in 2017 (new adjusted basis) and move ST Gains entry to LT entries) - or should I just delete the ST Gain entries and replace them (the ST and LT split entries) with the correct LT entries - and should I even report them as an adjustment since most don't line up at all with the original tax filing. YES, it is a big mess.
ron in shawnee
You will mail in the 1040X + any forms or schedules that changed and support the changes in column B.
And are you sure the broker did not step up the basis already ? For simplicity you can delete the original Sch D/8949 entries and re enter them correctly.
Critter - Yes, I am sure the Basis on the stock sales was not updated. In fact, I am not sure if the Brokerage did it and considered that maybe it was done by TurboTax. But SOMEBODY did make an attempt to help me out - because just the stocks that were held at my wife's death were split in half, using her data of Death as the Acquired Date on the LT Gains entries. Maybe the Brokerages, if they are the ones that did it thought they were helping me out and expected me to adjust the Basis myself.
That would have been a good try - except I lived in Texas at the time and the Step-up in Community Property states is 100%, as opposed to 50% for other states.
However, I am really impressed that the Brokerages are that smart - smart enough to have split the stock sales, which would have been proper for the non-Community Property states. I had 3 Brokerages at the time and stocks from all 3 of the Brokerages were split - and I think done rather correctly except for the Basis adjustment.
But the real mess right now is that all should have been reported as LT Gains - so I think your advice to just replace all 8949s, correctly updated is the best, most reasonable path to take. Adding all of the above verbiage for other people that missed the Basis adjustment as I did.
OK, one last question - should I just use my spouse's date of death on all of the stocks that I am adjusting the Basis on - and it seems like if I do that, I will just make an entry in column "f" (to note that these are adjusted entries), with no adjustment in column "g".
Thanks for the help.
ron in shawnee
the explanation for what you did goes in 1040X Part III.
you can be as terse or prolific as you see fit.
meanwhile just prepare a correct tax return and collect the pages that changed for attachment to form 1040x.
The operative word is correct. You must be certain your revised return is correct before reviewing Form 1040X.
Note: if 8949 changes, then Schedule D will change also.
IMHO, the easiest path is to fill out 1040X by hand yourself, by eyeball comparison of the original and revised Form 1040 placed side-by-side.
OK fanfare, thanks. I didn't realize I had that option because I hadn't gotten that far yet on the 1040X - but if I am offered the opportunity to explain what is going on, I think I can handle that - along with absolutely corrected 8949s and the associated Schedule D.
Thanks for the head's up.
ron in Shawnee
OK, OF COURSE - I don't know why I didn't connect up with that option.
I thought you were talking about a code for column "f", but when I went to the 8949 instructions, I could not find a code for "INHERIT".
However, you have been so "on" with your advice, I decided to double-check the stuff in the TurboTax Amended Return processing - and yes, I see one of the options in explaining the adjustment of a stock transaction is "this item was inherited" - good to get advice from someone who knows or has been through this before.
My apologies to all for jumping the gun with my questions without at least going through the TurboTax Amended Return process, completely. It appears that most of my questions would have been answered (or more generated) if I had done that.
So I thank you all - and I will go through the entire process and see if I have any questions at that point.
Thanks all for the help.
ron in shawnee