My 20 something year old kids had small amounts of GBTC and ETHE.
I spent HOURS looking for an answer to this question of how to report these because they appeared on their TDA 1099s. Before I get into what I did, not all brokerage houses report this.
For example, they also have similar amounts in Schwab accounts and they didn't report ANYTHING on the 1099s for these trust transactions.
In an attempt to find out what to do with the TDA 1099, I spent hours browsing - to no avail.
Virtually nothing from TurboTax.
I emailed GBTC. They replied that they don't answer tax related questions.
I called TDA and was put on hold for 20 minutes only to get "you need to call a tax professional."
The grand total for proceeds was $45 so there was no way I was going to call a tax pro.
As an explanation (you may already know), these investment trusts sell off some of the assets in the trust to pay expenses. It effectively reduces the assets in the trust (by a small %) and that affects the trust investors (that's us). That's why there are reporting proceeds that never make it to the investor.
But, what I found later in the 1099 was a page of "fees and expenses". One line for each transaction that exactly matched the proceeds.
So, I imported the TDA 1099 which showed only the proceeds in TT (not the fees or expenses).
In the Investment Income section, under Stocks, Cryptocurrency... section, I clicked Update.
Editing the TDA section, I looked for all of the GBTC and ETHE entries.
There was one for each month.
I was going to replace the 12 lines with 1 summary line but you can't because there are 12 "Date Sold" lines.
So, for the first line item, I clicked the pencil icon (to edit).
Sales Section: Unknown Term Basis (matching the 1099)
What type of investment: Mutual Fund, index fund, or ETF
Description: I entered the CUSIP and the description (no quantity of shares)
Select the information type: Something other than a date - chose Various
Date Sold: match the 1099
Proceeds: match the 1099
Cost or other basis: $0.00
Put a check mark in "The Cost basis is incorrect or missing on my 1099-B"
Click Continue
Check mark in "I paid sales expenses that aren't included in the sale proceeds..."
Enter what was in the 1099 as a fee which matches the proceeds dollar amount.
Continue
Check mark in "I don't want to make any changes to my cost basis..."
Continue
Answer the question "did you acquire this investment..." (decides short or long term which doesn't matter because the investment expense completely offsets the proceeds).
Continue
This brings you back to the tally of individual transactions.
You will see that the gain/loss for that line item is now $0.00
Repeat for each line item of GBTC and ETHE.
Hope that helps anyone else who is in this same boat.
And, I hope it's the correct approach. It certainly seems logical that the proceeds are offset by the expenses.
