Sale of business shares

[masonstclair]

I bought shares in a small business about 5 years ago. I sold my shares last year and  I received a 1099 misc for the full amount of the sale. I have 2 questions. 1. I should only have to pay taxes on the profit of the sale not including the initial investment, correct? 2. What is the proper way to enter the initial investment in Turbo Tax. Thank You, Mason

[DavidD66 · Accepted solution]

The amount you paid for the stock is your cost basis.  The amount you received when you sold them is the proceeds.  The difference between the proceeds and your cost basis is your capital gain (or loss).  To enter the sale, while logged in to your return, 

• Click on Search
• In the Search Window type Jump to 1099-B
• Click on Jump to 1099-B
• Click + Add an Account (if the account you were trying to download is showing, delete it first)
• Answer Yes to "Did you get a 1099-B or a brokerage statement for these sales?"
• Click on "I'll type it in myself"
• Select you Bank or brokerage and click Continue

The program will guide you through entering the sale of your stock.

[masonstclair]

Thank You DavidD66!!!!

[masonstclair]

DavidD66, Do I not type in the info for the 1099 misc that I got? When I do it just doubles up my taxes. Thx

[DavidD66 · Accepted solution]

If the proceeds from the sale of the stock was reported to you on Form 1099-MISC, do not enter it (or delete it).  It is an asset sale, and should be reported as such.  The worst case is you get a letter from IRS saying you didn't report the 1099-MISC.  If this were to occur, you would just write back and explain that it was for the sale of stock, and you reported the proceeds on Form 8949 and Schedule D (and enclose copies of those forms).