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Level 1

Question

Sold an option on 8/31/2020, bought it to close it on 6/17/2021. TurboTax says sale date cannot be before 01/01/2021. But this is exactly what 1099-B shows. What to do?

4 replies
39 views

Should I just set the sale date to 01/01/2021? How come TurboTax cannot handle situation like this?

TurboTax Premier Online

Alumni - Intuit

No, I suggest you reverse the dates, not the values.

This will give you the correct Profit/Loss, and it will properly determine the Short/Long term status.

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Level 15

For a short sale your Date Acquired is 6/17/2021.

Your Date Disposed is one business day later (options settle in one day).

This is the IRS specified reporting method. (see Instructions).

Some brokers give you an incorrect 1099-B for short sales.

Level 2

I'm having the same issue and I'm concerned if I move the sold date to 01/01/2021 it will be seen as inaccurate reporting. I'm not sure of the workaround and I didn't have this issue last year with TurboTax.

Alumni - Intuit

Options, whether short or long, upload into TurboTax generally without the need for adjustment. However, there are situations where you might have to make an adjustment or situations where an error message occurs because, as you have posted, the sell to open date precedes the buy to close date.

The important tax consideration here is to prepare a tax return that reflects the correct amount of gain or loss. In that regard, because the buy to close date of June 17, 2021, was the date you realized a profit/loss, you can use that date as your sell date and the sell to open date as your buy date. Manually entering long option transactions is more straightforward. With options on the short side, that do not upload automatically, then the aforementioned workaround is a way to at least prepare a return with the correct gain/loss amount.

@Thetaxinquirer

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