Getting an error "Date acquired is after date sold". I sold put option on 05/14/2020 and closed on 05/28/2020. why turbo tax report this an error?

[sky5]

Hi Geemonee
you don’t need to fix but just can ignore such need to review warnings after you import 1099B from broker  , just keep click continue and TT will allow such acquire is latter than sold date issues , it won’t block you filing later. 

[aataxes]

The 1099-B specifically uses the words Acquired and Sold respectively in boxes 1b and 1c.  For column b of form 8949 Date Acquired, the it's is quite specific here about short sales, "For a short sale, enter the date you acquired the property delivered to the broker or lender to close the short sale." (irs.gov/instructions/i8949).  

For column c, Date Sold or Disposed of the wording here is also specific, "For a short sale, enter the date you delivered the property to the broker or lender to close the short sale."

I have to tell you, I am not sure what any of that means when the property isn't property but a contract obligation, but I am guessing that those are the same date.

So E*trade and Robinhood report the transactions which may be wrong.  The correct thing appears to provide only the one date in both boxes; the closing date.

Still doesn't help my situation does it?  It doesn't matter who is right.  TT needs to help us.  Either by helping to institute a change at E*trade or accepting that their entries are incorrect, yet correctable and inconsequential.  I don't need to be reminded 339 times that E*trade is wrong and Intuit is right.  I need Intuit to fill out my 8489 automatically.  E*trade and Intuit are at an impasse and we all are caught in the crossfire.  So I guess I need access to an editable 8489 so I can make these changes.  Let's hope TT allows that, probably doesn't.

[Wire1]

I came here searching for answers cause I'm/was running into this same issue (option trades). I read your answer and thought that made sense: Just for clarity, it gives me a list of items to review; I click review, shows all the info imported from E-Trade and it is correct.  Though, "What type of investment...": Stock (non-employee) is selected. And I am not changing this selection, everything else matches 1099.  Click Continue, then the error indicator comes up "Date acquired is after date sold" with x.  I click the "x" (essentially ignoring the error), click continue, then Turbo Tax list the "these situations apply" question, I choose the 7th "none of these apply".  Spins for a second and shows "done" and disappears from my review list.  This is crazy...hopefully, this is okay...

[fanfare]

When you close a short, the correct Date Acquired is the date you closed the trade.

For options, Date Disposed is one business day later. Stock settles in two business days.

If you have a profit, Date Disposed is the same as Date Acquired.

Some brokers report this correctly, some do not.

As far as dates go, TD Ameritrade is one of the brokers that supplies a correct 1099-B in compliance with the IRS reporting rules in the IRS Publications.

[fanfare]

The correct solution is to use aggregation aka enter a summary.

TurboTax Online will ask you for a PDF copy of your consolidated 1099-B,

so no mailing is necessary.

Otherwise, mail the transaction details to the IRS within three business days of IRS accepting your e-Filed tax return.

--

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.

[sky5]

Hi aataxes,

yeah, like you said, that "short sale" is not for options but more for like short stocks...  

for example, if you write a call option for strike price $100, and when expire date reach, stock price is $90, then you dont need to "buy" another option to broker/lender to "close" your option,

same for buying a call option and expired with strike price higher than stock price. 

reporting of long/short options should refer to IRS pub550, unfortunately ,  there it only says, if you write a option, acquire date = closing date/expire date,     if you buy a option then disposition date = closing date/expire date.  But it does not clearly saying when write a option what should you do with deposition date , it suggest write a "expire" as deposition date in case of write a call and the call expires.   So in theory, 8949 column C deposition even could dont have a date but just word "expire", and  I really think TT should have a better way to allow user ignore deposition date is earlier than aquire date as long as user know these info are auto-imported from 1099b and are matching 1099b. 

Bottom line, matching 1099B info is more important and I dont think it is wrong to have sold date earlier than aquire date in case of writing option on 8949,  and you can force TT to ignore these warnings by just continue to next step on TT, as long as you are sure all info is matching your 1099B.  

[aataxes]

Sky5 I agree.  Those suggestions match some others I found.  Thanks.

[aataxes]

Fanfare.  Your suggestion is also thorough and correct.  I did this last year.  However it is important to report box A entries with adjustments in form 8949.  

It turns out if you purchase TT Deluxe desktop edition instead of using the online forms, it does this for you and allows for edits of the form directly that are easier to make.  Forget the online version if you have lots of entries to make.

[aataxes]

I have sent messages to E-Trade and Robinhood asking them to clarify there choice of filling out the form as they do... we'll see if they respond.

I ended up using TT Deluxe desktop instead of online edition, it handles everything more transparently.  Probably because you pay up front a bit.

[aataxes]

Wire1

This should suffice since the IRS only looks at the disposition date.  However the correct thing to do would be to make the dates the same or possibly one day later as one comment below suggests.  

I ended up using TT Deluxe desktop edition and the process was more automatic.  To be clear.  The version of TT Deluxe that you download and install on the PC.  

[aataxes]

That sounds right.  Thanks.  That really helps clarify things.

[sky5]

Hi Fanfare,

your suggestion works if there is no adjustment needed or the cost are all reported to IRS for all 1099B you got. otherwise , considering you have hundreds of transactions, and without auto-import all transcations, you wont be able (or very time consuming) to report those transcations need to have detail trancations on form 8949 and dont need to report on 8949. And once you use auto-import , it will come back to this noisy "aquire date is later than disposition date" problem. 

[aataxes]

Sky5

TT Deluxe Desktop edition summarizes it for you by automatically separating the normal box A transactions from those that had adjustments.  Essentially what it did was summarize all the trades that expired, and transferred all those that were covered in the 8949 including any wash sales...which by the way is complete crap for an option.  I just need to be more careful...I had one of those this year.

[fanfare]

@aataxes 

Does TurboTax Desktop his year prompt you to attach PDF of 1099-B.?

Last year, it didn't do it.

(If you itemized all wash sales and had no other categories, then no attachment is necessary.)

[aataxes]

Fanfare, No it didn't ask me to do that since it filled out the 8949 more or less correctly requiring only minor edit that can made directly on the form instead of through the slow online query pages.

So in summary: normal box A transactions do not need to be listed in the 8949.  Only adjusted ones do.  TT tallies up all the ones it detects as normal over all 1099-Bs, then places that total in the Schedule D box 1a.  Then it fills in the 8949 with what it detects as adjusted box A transactions and enters the total in schedule D box 1b.  Even though it looks like it put more transactions into the 8949 than it needed to, the tallies are correct.  I corrected a few dates in the form in a few minutes and I was done.