With the sale of ESPP stock you have 2 ways of entering the sale:
- You enter all the information on the "Tell us about your [Broker Name] 1099-B" page, entering the 1099-B exactly as it reads, wrong basis and all, and then click the "I'll enter additional information on my own" button and on the next page enter the correct basis.
- You enter all the information on the "Tell us about your [Broker Name]
1099-B" page, entering the 1099-B exactly as it reads, wrong basis and all,
and then click the "Guide me step-by-step" button, telling TurboTax that you're entering the sale of stock received via an ESPP, and completing the interview.
Either method, properly done, should result in a correctly entered sale. The first method puts a "B" in column (f) of the Form 8949 while the second method puts an "O" in column (f). As far as I can remember TurboTax has always entered transactions using the two methods with these two different codes. Code "B" would seem to be the correct code here given the IRS's instructions:
- You received a Form 1099-B (or substitute statement) and the basis shown in box 1e is incorrect...
- If this transaction is reported on a Part I with box A checked at the
top or if this transaction is reported on a Part II with box D checked
at the top, enter the basis shown on Form 1099-B (or substitute
statement) in column (e), even though that basis is incorrect. Correct
the error by entering an adjustment in column (g)...
However, your obligation as a taxpayer is to properly report your income. Having done that you are pretty much bullet proof when it comes to the IRS and I wouldn't lose a minutes sleep over what codes are used in column (f). You can go into "Forms mode" and override the code TurboTax has used, but I just wouldn't bother; at this point we're simply talking about "style", not "substance".
Tom Young
