A Qualifying disposition is a sale of the stock that you've held for more than a year and more than two years after the grant date. You ALWAYS have the right to sell the stock.
As you know the sale of shares acquired via an ESPP can create compensation income and if it does this compensation income: 1. Is reported as compensation income on line 7 of the Form 1040 and 2. Is added to the out of pocket cost of the stock to derive a basis that you use in reporting the sale.
You can accomplish both of these goals by using the ESPP step by step interview and answering "No" to the question TurboTax asks at the end of the "Stocks, Mutual Funds, Bonds, Other" interview as to whether the compensation it has calculated has been reported on your W-2.
You can also simply correct the cost basis using the regular "1099-B" interview and then reporting the compensation by:
Starting the "Miscellaneous Income, 1099-A, 11099-C" interview.
Starting the "Other income not already reported on a Form W-2 or Form 1099" interview.
Answering "Yes" on the "Other Wages Received" page.
Entering $0 on the "Wages Earned as a Household Employee" page.
Entering $0 on the "Sick or Disability Pay" page.
Answering "Yes" on the "Any Other Earned Income" page.
Ticking "Other on the "Enter Source of Other Earned Income" page.
Entering a description and an amount on the "Any Other Earned Income" page.
