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dumas1202
New Member

DSPP common stock reinvestment where do I put it on the tax form

 
4 Replies
IsabellaG
Expert Alumni

DSPP common stock reinvestment where do I put it on the tax form

There's nothing to report until you sell the stock, then the purchase price plus the reinvested dividends (that you report as income each year) are added to the cost basis of your stock.

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JJM2881
Returning Member

DSPP common stock reinvestment where do I put it on the tax form

My wife used payroll deduction to purchase stock in a DSPP and has been in th  plan since 2001.  We sold a lareg portion of the  stock in Dec 2018. How do I determine cost basis for the sale (FIFO), to determine Capital Gains. Which forms do I have to fill out for IRS. On the turbotax worksheet there is no stock plan labeled DSPP but there are four other choices(ESPP, NQSOor ISO, Restricted stock, or RSU), which one would I use?

 

Any guidance would help

ThomasM125
Expert Alumni

DSPP common stock reinvestment where do I put it on the tax form

You report the sale as employee stock purchase plan (ESPP) as follows:

 

1. Find the "Income and Expenses" menu option in your TurboTax program

2. Find "Investment Income" in the list of categories

3. Click on "Stocks, Mutual Funds, Bonds and Other"

4. Work through the program to find "Choose the type of Investment you Sold"

5. Choose the "Employee Stock Purchase Plan" option in the list of investments

6. Enter the information requested about your sale (date sold, sale amount, cost basis, etc...)

 

If you purchased the stock at a discount, the program will ask you questions to determine the correct treatment of your sales.

 

As far as the cost basis is concerned, the company may be able to provide you with a transcript you can use to determine the cost basis. Otherwise, you will need to create a schedule as best as is possible by looking up the cost of the stock online and factoring in how many share were acquired by period.

 

 

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TomYoung
Level 13

DSPP common stock reinvestment where do I put it on the tax form

You said "DSPP" not "ESPP", didn't mention any discounted purchase price or say anything about receiving Form 3922, so I'm guessing this is plain-vanilla stock, stock that's not a bit different than a stock you might purchase through your broker.  So you pull out your record of purchases and fire up your spreadsheet to calculate the basis.  If you didn't make an election before the sale settled to use a different method of calculating basis, then FIFO is the default method.

 

Depending on how much stock you sold your 1099-B could have different sales categories such as long-term noncovered, long-term covered and short-term covered.  If that's the case the you should have to only determine the basis for the long-term noncovered portion.

 

Use the "Stocks,Mutual Funds, Bonds, Other" interview.  For date acquired you can use the word "various"; the holding period for the sale is determined by the sales category you select.

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