Turbo Tax Deluxe will handle your employee stock transactions. You should receive a Form 1099-B reporting the sale of the stocks. If you sold the stock for less than you purchased it, you will have a capital loss that may be deductible against ordinary income. If you sell the stock less than two years from when you were granted the right to purchase it, or less than a year from when you acquired it, you will see the discount you received when you purchased it appear as wage income in box 1 on your W-2 form. That will be added to your cost basis in the stock that will be used to determine your capital loss on sale. Your combined net capital losses are limited to an annual deduction of $3,000.
When you enter the Form 1099-B in TurboTax for the sale of the stock, you will see an option to report it as Employee Stock Purchase Plan (ESPP). Once you choose that option, TurboTax will guide you through the entries to properly account for your employee stock sale. You enter your Form 1099-B in the Wages and Income section, then Investment Income, then Stocks, Mutual Funds, Cryptocurrency, Bonds, Other.
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