Non Covered Security And Schedule D

[DIY_HarryWhodini]

For context: It's my last year using our long-time CPA. I'm going back to DIY as we are nearing retirement and our situation has become simpler. I prepared a 2024 return in parallel with him, using TT 2024 Home & Business, and am pleased that it's within a dollar of tax owed and most forms look identical. I'm pretty confident going forward (I prepared my own tax returns for nearly 20 years prior to may small business growing and adding a pension plan, and also the addition of some rental property. Business has wound down, pension plan closed, property has since been sold)

TL/DR: But I have some trouble with Schedule D. I have a sale of stock that includes covered and noncovered shares (I have a spreadsheet with the exact costs) The CPA has the sale split between line 8b and line 9 on Schedule D.

"Totals for all transactions reported on Form(s) 8949 with Box D checked"

"Totals for all transactions reported on Form(s) 8949 with Box E checked"

When I enter the data on TurboTax, I can't seem to find a prompt that will split the sale. I checked the box that says "the reported basis is incorrect or missing", and everything ends up on Schedule D, Line 9.

The basis, gain, and tax all match the CPA's return. Plus I'm just doing a test run in parallel. But I'll be DIY next year, and this has puzzled me a bit. If anyone here has a data entry procedure that can help, I'll certainly try it.

Cheers

[fanfare]

"When I enter the data on TurboTax, I can't seem to find a prompt that will split the sale."

There is no such prompt. Partition your transactions yourself. Hint: Your consolidated 1099-B has done this already.

Enter the covered transactions under Box Category A or D.

Enter the non-covered transaction under Box Category B or E

@DIY_HarryWhodini 

[DIY_HarryWhodini]

Hi Fanfare, thanks for responding.

If I was filling out the form by hand, I would simply put the amounts in the correct lines.

With TurboTax, interview mode forces me to choose covered/ noncovered, and forms mode does not seem to allow data input directly on Schedule D.

The only solution I can come up with is to enter the sale twice, once with the covered shares, once with the noncovered shares, in interview mode (as if it were two transactions) When I do that, Schedule D matches the CPA's work, and it matches how I would do it with pencil and paper.

Is there another way, or is this what you were suggesting?

Cheers

@fanfare 

[fanfare]

Schedule D Line 8b and Line 9 both require that Form 8949 is attached.

If you are not excused by the detail reporting exception,
IRS requires details of your SELL transactions to be supplied on some Form 8949,
or on your other forms (e.g. consolidated 1099-B or spreadsheet) which have the same information and in the same manner as Form 8949.

This is so, even when the broker has sent details to the IRS already

The exception does not include wash sales, since they have an adjustment.
Either way, if you choose to summarize some or all transactions, you have to a) include the details with your mailed tax return,
or b) mail the transaction details to the IRS within three business days of IRS accepting your e-Filed tax return. (unless you have attached a PDF of the transactions details to your e-Filed return. TurboTax Online will ask for it).
-----
Detail Reporting Exception: if you summarize Category A or Category D, Form 8949 is not needed for transactions without adjustments. No mailing is necessary. No attachment is necessary.

There is no exception for the other categories.
=========
You are reporting Box B and E, not A and D

[DIY_HarryWhodini]

Hi Fanfare, yes, TurboTax created an 8949 for each of the 2 parts of the transaction. This matches what the CPA did.

And apologies, when I'm saying "box D and E", I'm just repeating what it says on Schedule D. Boxes A&B are for short-term gains and losses, yes? Both my covered and noncovered shares have long-term gains (I turned off dividend reinvestment a few years ago on this holding)

Thanks for sticking with me on this!

Cheers

@fanfare