I just tried and confirmed a manual entry override will work to correct for the adjusted cost basis:
I made manual adjustments in the Capital Gain/Loss Adjustments Worksheets for each of the ESPP sales (Box A short term covered) that I had. In Part III, I checked the box for "Form 1099-B reports an incorrect basis (Code B). Corrected basis...." and I entered the correct adjusted cost basis (e.g. #shares purchased x last day Mkt value). That in turn resulted in the Form 1099-B Worksheet (E-Trade) to reflect the cost basis adjustment and the corrected Gain (Loss) based on the adjusted cost basis. This in turn resulted in Schedule D, Part 1 1b to reflect the cost adjustment and Gain (Loss) for the Box A ESPP sales. And this in turn resulted in the correct Capital Gain (Loss) on Line 7 or Form 1040.
While this is good for now, I can only wonder what might happen if TurboTax corrects this bug before I actually file, and if so, might that some how 'double-correct' and result in a new error. I'll need to check Line 7 on Form 1040 just prior to filing to be sure...
It seems like every year, dealing with Employee Stock (ESPP, RSUs, etc.) is a challenge in TurboTax. This year appears to be the worst, in that it's actually broken.
Problem appears solved with the manual override.
