We have some stock that we may sell. Etrade shows the value is about $50,000, and if we sell it, they will take out about $30K in taxes. Leaving us with a check for $20K that we need for a car. So we sell it for $50K and take home only $20K at the time of the sale.
When we get Etrade paperwork at the end of the year, it will say that we earned $50K, but the "adjusted cost basis" was $20K? Is that right? (1) What is a simple definition of adjusted cost basis?
The two other questions we have are: (2) Is the $20K we just received added to our regular salary/income? If if my job pays me $80K a year, have I now earned $100,000 this year. And I have to pay taxes as if $100K were my full income? Or have I earned $130K and I already paid $30 in taxes, still owing taxes on the $80K as usual?
And (3)... I THINK that since Etrade already withheld $30K in taxes, then I'm not taxed again on the $20K. But is there some instructions on TurboTax or Intuit websites about how exactly we enter this? The Etrade rep actually told us to make sure we don't pay taxes twice. Obviously I don't want to that, so where should I enter all of this on TurboTax?
Lots of unresolved questions in this forum about Adjusted Cost basis vs. Corrected cost basis. It's a mystery to me and would appreciate any help. Thanks!
thanks!
