Absolutely - this is a TurboTax error. Here's what I found (sorry if too much info):
TurboTax is 'broken'. For the 1st time, I find that it is incorrectly calculating my income. In particular, the Capital Gains from Schedule D are being overstated because the cost basis for my ESPP sales is not picking up the 'adjusted cost basis'.
My ESPP sales are all short term covered (Box A). When entering each of these sales, I entered the Box 1e cost basis as reported on my 1099-B, and then after reporting this as an ESPP sale, I made the appropriate cost basis adjustment (e.g. adding back the value from the employee discount). All calculations/details I could see through the entry process seemed to indicate that the cost basis was being adjusted correctly; the short term gains (losses) were consistent with the adjusted cost basis. Part VII of the Employee Stock Worksheet (29 e. & 29 f.) reflects the correct adjusted cost basis & gain (loss). However, the Cap Gain/Loss Adjustments Worksheet does NOT reflect the adjusted cost. As a result, the Cost basis in Schedule D (Part I, 1b (e)) does NOT reflect the adjusted cost.
Bottom line is Turbo Tax is broke and if I don't make a manual adjustment, my calculated taxes will be too high. And while I may be able to make manual adjustments in the 'Forms' section of TurboTax, I of course run the risk of creating another unknown error in TurboTax.
I'm hoping TurboTax sees this and fixes the bug!
