Investors & landlords

"My form had it as $0.00 is this correct?"

 

No, it's not correct.

 

When your shares vested your employer calculated an amount of compensation for those shares, and reported that in Box 1 of the W-2, so you're going to pay taxes on that compensation.  The calculation of the compensation is:

 

(GROSS number of shares vesting before any "withhold" of shares or sale of shares for taxes) X (per-share FMV at vesting.)

 

So your per share basis is the same as the per share FMV your employer used.

 

If the 1099-B is reporting the basis to the IRS and is not using the correct basis then enter the 1099-B as it reads in the spreadsheet-like "fill in the boxes" default entry form.  Don't put anything in the "1g" box on this page.   Then click on the "Add More Details" box (or maybe "Edit Details"), and the "Start" button, (or maybe "Edit".)

 

On the next page select the first option which is to "I need to add or fix info about this sale that's on my Form 1099-B."  Don't select the 2nd option of "This sale may require special handling."  Tell TurboTax that the 1099-B is reporting the wrong basis and then enter the "missing" compensation to get to the correct basis.

TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.

If this is a "same day" sale then the most common result from entering the sale is a small loss due to selling commissions and fees.

I've given this same advise repeatedly and posted a pictorial step by step guide, (for the sale of stock acquired via an RSU, but the process is applicable to any employer incentive stock plan sale), here https://ttlc.intuit.com/questions/2767718-i-received-a-letter-from-merrill-lynch-saying-there-is-an-...

Tom Young

 

EDIT:  THIS QUESTION WAS ASKED WHEN 2014 INCOME TAX RETURNS WERE BEING PREPARED.  SINCE THE PROGRAMMERS SEEM TO CHANGE THE STOCK SALES INTERVIEWS EVERY SINGLE YEAR THE STEP BY STEP PROCESS LAID OUT ABOVE PERTAINS ONLY TO THE 2014 PROGRAM.  THE TAX CONCEPTS HAVE NOT CHANGED BUT THE PROGRAMMING ALMOST CERTAINLY HAS.

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