ESPP stock sale and reporting cost basis?

[Adam321]

I work for a company that was recently acquired and we were forced to sell all our stock.  I had been purchasing stock in this account since around the time I started which is around 14 years ago.  I received a 1099-B and inputted the data using the summary method.  Is that sufficient or does each transaction need to be inputted an if so where do I get 14 years worth of the 3922 information?  Is this something that can be imported from Morgan Stanley?  

[SantinoD]

It is ok to use the summary method by entering the sales totals. 

Simply enter your 1099-B to report the sale on your tax return and we’ll prompt you for the rest. You should have received Form 3922 when you exercised your stock options, have your Form 3922 handy because you’ll need information from there to adjust your basis to properly report the gain or loss.

You can import your 1099-B info from Morgan Stanley, but you will need Form 3922 as well to make any necessary adjustments.

Here's where you enter or import your 1099-B in TurboTax:

1. Open (continue) your return, if you haven't already
2. Locate the search bar. Search for 1099-B, then select the Jump to link in the search results
3. Select Okay! on the screen Time to kick off your investments! OR Yes on the screen Did you sell any of these investments? then Continue
   • If you see Your investments and savings or Your investment sales summary, select Add investments or Add more sales
4. When you reach Let's import your tax info, choose how you want to enter your 1099-B:
   • To import your form, select your brokerage or financial institution from the list. Enter your sign-in credentials for your account, then select Get my form
   • If you want to enter your 1099-B manually, select Enter a different way, then select your investment type on the next screen
5. On the following screens, answer the questions about your 1099-B
6. When you reach the Review your sales screen, the form you just entered should be listed
   • If you need to add another 1099-B, select Add another sale. Otherwise, Continue

To learn more about ESPP, go here: Employee Stock Purchase Plans

[Adam321]

On my 1099-B there are entries for both covered and non-covered short-term/long-term securities.  I cannot locate the 3922 from the sale in my mail or online with Morgan Stanley.  The sale price is the same for everything, but the number of purchase transactions would be quite a few.  The other thing I am not sure how to do is match up the summarized 1099-B with the shares on the 3922 given they were all purchased quarterly for many years.  The 1099-B lists the cost basis, but not sure if I have to reconcile that with each purchase transaction on the tax return?

[SantinoD]

The noncovered transactions are most likely the ESPP stock, Noncovered cost basis means that your brokerage firm is NOT responsible for reporting cost basis information to the IRS and will only report the sales information. For noncovered securities, you are responsible for reporting cost basis information to the IRS when you file your taxes.

When you sell the stock, the discount that you received when you bought the stock is generally considered additional compensation to you, so you have to pay taxes on it as regular income.

• If you hold the stock for a year or less before you sell it, any gains will be considered compensation and taxed as such.
• If you hold the shares for more than one year, any profit will be taxed at the usually lower capital gains

This is the reason we need the 3922. This form will have the information needed so you report it accurately. I advise to contact Morgan Stanley directly so they can send you this form.