I sold some of my stock last year that I purchased with my company's ESPP. Fidelity provides 2 different things; "Tax Reporting Statement" and "Supplemental Information" The supplemental info shows the ordinary income reported, along with the adjusted cost and adjusted gain/loss. Assuming, so you don't get taxed twice here. Can I simply replace the adjusted cost on the supplemental form into the box 1e "cost or other basis"? Or must this adjustment be represented in another way/box?
Assuming that the compensation ("ordinary income") is reported on your W-2 what you do is:
Enter the 1099-B exactly as it reads and then click the blue "I'll enter additional info on my own" button. On the next page enter the correct basis in the "Corrected cost basis" box.
Tom Young
(SINCE THE DEVELOPERS CHANGE THE SECURITY SALE INTERVIEW EVERY SINGLE YEAR I'LL NOTE THAT THIS ANSWER'S DIRECTIONS ON HOW TO CORRECT THE BASIS FOR THE SALE PERTAINS TO THE 2016 INCOME TAX YEAR. I'M SURE THAT THE INTERVIEW WILL CHANGE IN THE YEARS AFTER THAT.)
Can we assume it has been reported on the W2? How can we tell if it has/hasn't? If it hasn't, then what?
It should be reported to you as a memo item in Box 14 if it is. Is this a Qualifying disposition? Or a Disqualifying disposition?
Box 14 only displays a united way contribution I made. By qualifying disposition are you saying that I had the right to sell the shares? If so, yes, the shares I sold fell out of the holding period. I had them along enough.
A Qualifying disposition is a sale of the stock that you've held for more than a year and more than two years after the grant date. You ALWAYS have the right to sell the stock.
As you know the sale of shares acquired via an ESPP can create compensation income and if it does this compensation income: 1. Is reported as compensation income on line 7 of the Form 1040 and 2. Is added to the out of pocket cost of the stock to derive a basis that you use in reporting the sale.
You can accomplish both of these goals by using the ESPP step by step interview and answering "No" to the question TurboTax asks at the end of the "Stocks, Mutual Funds, Bonds, Other" interview as to whether the compensation it has calculated has been reported on your W-2.
You can also simply correct the cost basis using the regular "1099-B" interview and then reporting the compensation by:
Starting the "Miscellaneous Income, 1099-A, 11099-C" interview.
Starting the "Other income not already reported on a Form W-2 or Form 1099" interview.
Answering "Yes" on the "Other Wages Received" page.
Entering $0 on the "Wages Earned as a Household Employee" page.
Entering $0 on the "Sick or Disability Pay" page.
Answering "Yes" on the "Any Other Earned Income" page.
Ticking "Other on the "Enter Source of Other Earned Income" page.
Entering a description and an amount on the "Any Other Earned Income" page.