The answer was found by reviewing forms created by Turbo Tax. On the form designated ESP Comp Wks, also known as "Summary of Compensation Income From Employer Stock Transactions", a portion of the proceeds from the sale of stock obtained through an ESPP is calculated as Additional Compensation Income. The sales are reported on form 1099-B from my financial institution as long term transactions for which basis is not reported to the IRS to be reported on Form 8949 with Box E checked. The government allows employers to purchase shares of their company for its employees at a discount up to 15% of market value. To the extent the discount is more than 15%, the excess is counted as income. I have no W2 for this income since this sale was made after I retired. Part II of the ESP Comp Wks identifies $1760 to be reported as "Additional Compensation Income to be reported on Form 1040, Line 1. It is disappointing that Turbo-Tax did not trace the supporting documents for Line 1 of Form 1040 to the ESP Comp Wks, but Turbo Tax limited its search to only W2's where I had none.
