dmertz
Level 15

Retirement tax questions

The Form 1099-R appear to be reporting an in-kind distribution of the ESOP shares.  With an in-kind distribution, the cost basis of the shares becomes the gross distribution amount shown in box 1 of the Form 1099-R.  The holding period for the shares begins on the date of distribution, so the sale reported on the Form 1099-B is a sale of a short-term capital investment.  Presumably the Form 1099-B is reporting an non-covered sale requiring you to provide the cost basis, the distribution amount on the Form 1099-R, so your short-term gain/loss is $0.

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