Form 8949 generating a negative adjustment in col. G when it should be a pos. adjustment. This makes it look like a wash sale disallowance rather than a basis increase

[randomuser314]

How do I fix this?

[MelindaS1]

Here's how to navigate to the capital asset sales menu to edit your entries:

Navigate to the 1099-B section:

• TurboTax Online/Mobile: Go to the 1099-B (<click here) screen under Wages & Income.
   
• TurboTax Desktop:

1. Go to Federal Taxes.
2. Go to Wages & Income. 
3. If asked How do you want to enter…?, select I’ll choose what I work on.
4. Under Investment Income, select Start or Update next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other.

Why would you have an increase in basis on this transaction? With further information, I can help you input it more accurately. 

[randomuser314]

Hi -- thank you, here's some more context:

I exercised and sold shares of a private company via a company buyback on the same day — a same-day exercise and sale of Incentive Stock Options (ISOs), which constitutes a disqualifying disposition.

My 1099-B reports:

• Proceeds: $X
• Cost basis: $Y
• Wash sale disallowed: $0.00
• Gain: $Z

However, the spread between the exercise price and fair market value at exercise was already included as ordinary compensation income in my 2025 W-2 (Box 1). Per IRS rules for ISO disqualifying dispositions, I need to increase my cost basis by that spread amount to avoid being double-taxed on the same income. My correct adjusted basis is therefore $Y + spread, resulting in a small capital loss.

I have selected 'Incentive stock options (ISO)' as the investment type and entered the adjusted cost basis accordingly. However, my Form 8949 PDF preview is incorrectly showing the column (g) adjustment as a negative number with a wash sale code, rather than as a positive basis adjustment. This is wrong — there is no wash sale involved, and the negative sign means TurboTax is reducing my basis rather than increasing it, which would result in double taxation of income already reported on my W-2.

Can you advise how to correct the Form 8949 output so it properly reflects a positive basis adjustment for ISO compensation income already reported on my W-2?

[DavidD66]

I recommend you delete your entry for the exercise and sale of your Incentive Stock Options.  When you re-enter answer NO to the question "Do these sales include any employee stock?"  Answering yes is only helpful with ISOs if you exercise and hold.  When you enter your transaction enter the Cost Basis on your Form 1099-B and check the box below that for "The cost basis is incorrect or missing on my 1099-B.  Continue to the screen with "Let us know if any of these situations apply to this sale" - check the box for "None of these apply.  Continue and indicate that you know your cost basis and then enter your "Actual cost basis" - not an adjustment.  As I believe you already know, that would be the exercise price plus the amount of the Bargain Element of the option that was included in your income and reported on W-2.  

If you are using TurboTax Online, don't rely on the amounts that show in the interview sections of the program.  They sometimes don't reflect adjustments.  I recommend you go ahead and pay for TurboTax so you can print (or create a PDF) of your return or individual forms and schedules.