"How do I handle reporting a capital gain without 1099?"
Using the "Stocks, Mutual Funds, Bonds, Other" interview you simply tell TurboTax that no 1099-B was received and you'll be shunted into a slightly different interview than if you told TurboTax that a 1099-B was received. These sales will be reported as "Box C" or "Box F" sales, depending on your holding period.
"Also, I had to update the cost basis of several reported 1099-B cost basis due to ESPP impact. What is impact?
"
The answer depends on your particular situation. Obviously one impact is that your basis used for the sale is increased since you added the compensation created by the sale to your out of pocket cost for the stock. If the compensation was reported to you on a W-2 then that increase in basis is all that happens. If the compensation was not reported on a W-2 then the other impact should be that the compensation gets added to line 7 of your Form 1040.
If the compensation was reported on a W-2 then you can report the sales by simply selling "stock", (not "ESPP stock"), and entering the correct basis in the cost basis box; there's no "adjustment" needed as the basis wasn't reported to the IRS on a 1099-B. But if the compensation was not reported on a W-2 then you should select "ESPP stock" as what was sold and work through the ESPP step by step interview. At the very end of the "Stocks, Mutual Funds, Bonds, Other" interview - you're not done when you enter your trades - there's a page where TurboTax shows you the compensation it has calculated and asks if that amount is on your W-2. You answer "No" and that amount gets added to line 7 of Form 1040.
Tom Young
