1099-B doesn't support negative value in box 1d

[Jimmy W]

Hi, Vicmyers:

What I worried (from other forums) is what is in the IRS database is what the brokers sent which shows negative proceeds and zero costs. So while getting through Turbo Tax , you get a error notice or an audit from IRS because what you input in TurboTax is different from what they have.

many people are still waiting for Turbo Tax to fix the problem - allowing the negatives to go through 

thanks

[shanehooker653]

I have over 56 pages in my 1099-B with many vertical spreads and short option legs that report negative proceeds. Manually changes the negative proceeds values is not an optimal solution. Will someone from TT confirm if there is a bug reported against this and when to expect it may be resolved?

[mattgna15]

Having the same issue. I understand the fix by flipping the cost basis and proceeds but that is not what happened so doesnt seem right to fix it just to accomodate a bad software issue. Please fix and let us know when we can submit. 

[vicmyers]

I agree with you. Turbo Tax should fix this, if the broker, TD Ameritrade, in my case cannot.  But who knows how long it will take for Turbo Tax to address this.  In my case, the manual fix allows the final error check to pass and to allow tax filing.   And the G/L numbers are accurate.

After calling technical help at TurboTax and waiting over an hour to reach someone, I am very disappointed in the service.  The person could not help, could not even promise to pass on the problem to software development, urged me to purchase TurboTax live so that I could talk to a CPA.  And I thought I had decent ability to get help with a TurboTax Advantage account.  Mention was made of talking to an "expert", but the person on the call could not tell me where to find the option for that on the website.  They did not even seem to be aware that the problem existed.  The community forum  seems to be only place to get any help aside from the very basic stuff.

The only reason for staying with Turbo Tax is the fact that my tax history gets carried over from one year to the next.  Does anyone know how easy or difficult it is to migrate to another tax service and be able to bring along one's tax history?

[Anonymous]

The issue is with TurboTax software and they are suggesting to fix it by manual editing each entry. This is completely ridiculous service for the premium service fees they are charging. I fixed it all 200+ entries by myself and had to expend more than 2 hours for that and verifying it manually. I expect some rebate in the fees that I paid for automated software.

[kimchu58]

Thanks for the reply.

I opened a case with TD Ameritrade and according to their tax department, they have not been told by IRS to not use negative Proceeds for 2020 taxes.  If this is the case, it would help if you can provide documentation or Communications from IRS stating they will reject returns with negative Proceeds. This will help us convince the brokers that they are incorrect as it appears from the forum that  more than one broker is doing this (Fidelity as well). We are being put in the middle of this situation where we are asked by Intuit to manual modify the entries, running the risk of an audit because doing so, the total Proceeds will be different than what is reported by the 1099B.  As you mentioned, the Brokers have used negative Proceeds last year.  Hopefully Intuit is working with them to correct this for tax year 2020 as this seems to be a wide spread issue.  And if Intuit is not working with the Brokers, at least give us the documentations so that we can go back to the Brokers to convince them ourselves. If IRS told Intuit that returns will be rejected with negative Proceeds, Intuit must have documentation on this. Currently, the instructions for 1099B clearly states that negative numbers can be entered via parentheses as well. Please share the communication with IRS.

Thanks

Kim

[TheRealTax2]

I took the advice of the TT experts here and set 1d to 0 and negative proceeds as a positive basis. This worked and gain / loss did stayed the same. Did I just set myself up for a letter from the IRS due to reported 1099-b proceeds and basis not matching? If this is the case then customers should be warned that the suggested change will trigger an audit. We now have three brokerages that are reporting negative proceeds on 1099-b. What has to be done if it turns out the TT fixes it on the software side? Would i just amend the return using the original 1099-b unmodified values?

[TheRealTax2]

I took the advice of the TT experts here and set 1d to 0 and negative proceeds as a positive basis. This worked and gain / loss did stayed the same. Did I just set myself up for a letter from the IRS due to reported 1099-b proceeds and basis not matching? If this is the case then customers should be warned that the suggested change will trigger an audit. We now have three brokerages that are reporting negative proceeds on 1099-b. What has to be done if it turns out that TT fixes it on the software side? Would i just amend the return using the original 1099-b unmodified values?

[shanehooker653]

I too am modifying these values manually. Is there a more efficient way? I'm using TT online and have to go through each page of entries. There are 24 pages and navigating through the browser is painful. Why can't I go directly to a form to make these manual adjustments. Each entry I need to modify takes approx 2 minutes from start to finish using the online program. With approx 96 entries needing modifications this is going to take a long time.

[D_ONEILL]

@ToddL99 

So, TD Ameritrade, Fidelity, and E*TRADE all report these negative values, which seems to be in accordance with the latest 1099-B instructions (linked below)...methinks this is a TurboTax issue.  No work-around by TT clients should be required.

https://www.irs.gov/pub/irs-pdf/i1099b.pdf

“Box 1d. Proceeds
Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses.”

[D_ONEILL]

@Mike9241 

@ToddL99 

The latest 1099-B instructions disagree with your assertions.  This is a TurboTax problem, not a broker problem.

https://www.irs.gov/pub/irs-pdf/i1099b.pdf

”Box 1d. Proceeds
Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses.”

[brxb88]

thank you, vicmyers...

did you also check the box called "The cost basis is incorrect or missing on my 1099-B"?

fully realize that the net result is the same but is still editing figures.

[MNO]

I guess if TT does not fix it, you can print the forms and file by mail.  That way the schedule D will match the 1099?  If that is what I end up doing, it will be the last year I use TT.

[shanehooker653]

This is a turbo tax issue that needs to be fixed. As mentioned by others in this thread TD Ameritrade, Fidelity, and E*TRADE all report these negative values, which seems to be in accordance with the latest 1099-B instructions (linked below).  No work-around by TT clients should be required.

https://www.irs.gov/pub/irs-pdf/i1099b.pdf

“Box 1d. Proceeds
Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses.”

[dzzz]

I agree.  I also spoke with TD Ameritrade and essentially had the same discussion that you did.  I tried to contact TT but could never get through to anyone.  So now I don't know if TT has any intentions of fixing the problem or if they consider it their problem.  If they are not going to fix the problem then the only thing that I know to do is make the change manually but I have never changed the numbers from my broker because I want my numbers to match what they submit--in total and line by line.  I don't know if this will trigger an audit or rejection of the return.  TT should at least address this issue publically so we know if a fix is in the works and worth waiting for or not....has anyone gotten an official stance from them?