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dgtax7
Level 2

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

 

During both years 2019 and 2020, I sold ESPP stocks and have no W-2s. I entered my ESPP stock sales similarly for both years using step by step, although there seems to be minor variations in this process between TT2019 and TT2020. And I see that Form 8949 & Schedule D are populated differently for TT2020 than for TT2019. I want to know if these are TT2020 software bugs? Are the 2020 Form 8949 and Schedule D correct and ok to file as is or should I be concerned and wait for fixes?

 

1.   I entered all amounts as dollars and cents during both years. TT2019 retained my amounts to dollars and cents on Form 8949, while TT2020 is rounding to dollars only.

 

2.   Form 8949 - columns (e), (f) and (g) seem to be handled differently between TT2020 an TT2019, thus causing Schedule D population of (e) and (g) to be different between TT2020 and TT2019.

 

On the 1099-B, my stock sales are "Long-term for which basis is not reported to the IRS --report on Form 8949 with Box E checked and/or Schedule D, Part II". Both TT2020 and TT2019 appear to calculate the ESPP discount reflected as ordinary income correctly and are reported correctly on line 1 of Form 1040.

 

Refer to my example below:
Ex. In both years 2019 and 2020, I sold 10 ESPP shares of company XYZ with same Acquire dates. I am no longer employed with company XYZ and have no W-2s and my employee stock discounts were not reflected on any W-2s at the time of ESPP stock purchases when I was employed at company XYZ.

 

2019 Form 8949 Part II columns (Box E checked):
(a) 10 sh. XYZ      (b) Date Acquired 01/01/09     (c) Date Sold 08/13/19

(d) Proceeds 2,627.81      (e) Cost or Other Basis 268.66
(f) Adjustment Code O    (g) Amount of Adjustment -47.42      (h) Gain or (loss) 2,311.72

 

2019 Schedule D Part II Long Term Capital Gains and Losses, Line 9 Totals for all transactions reported on Form(s) 8949 with Box E checked columns:
(d) Proceeds 2,628.      (e) Cost (or other basis) 269.
(g) Adjustments to gain or loss from Form(s) 8949 ...    -47.        (h) Gain or (loss) 2,312.

 

---------------------------------------------------
2020 Form 8949 Part II columns (Box E checked)::
(a) 10 sh. XYZ     (b) Date Acquired 01/01/09     (c) Date Sold 10/12/20

(d) Proceeds 3,269.          (e) Cost or Other Basis 433.
(f) Adjustment Code B    (g) Amount of Adjustment 0.               (h) Gain or (loss) 2,836.

 

2020 Schedule D Part II Long Term Capital Gains and Losses, Line 9 Totals for all transactions reported on Form(s) 8949 with Box E checked columns:
(d) Proceeds 3,269.      (e) Cost (or other basis) 433.
(g) Adjustments to gain or loss from Form(s) 8949 ... 0.              (h) Gain or (loss) 2,836.

3.   In the above example:
The 2019 ESPP discount ordinary income amount of 47. is spiked out separately as (g) Adjustment -47. and (f) Adjustment Code of O on Form 8949.

 

The 2020 ESPP discount ordinary income amount of 65. is lumped into the (e) Cost or Other Basis amount 433. with no amount in (g) Adjustment 0. and (f) Adjustment Code of B on Form 8949.

 

Why was the ordinary income accounted for differently, as well as the adjustment amounts and adjustment codes for TT2020 vs TT2019 on Form 8949?

What do Adjustment Codes B and O mean?

When should B be used and when should O be used?

Does the IRS care what code is used?

 

I want to know if these are TT2020 software bugs? Are the 2020 Form 8949 and Schedule D correct and ok to file as is or should I be concerned and wait for fixes?

7 Replies
fanfare
Level 15

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

why would IRS require codes if they didn't care what you put there ?

 

B - Basis -- Your 1099-B shows an incorrect basis and you are adjusting for that.

O - Other -- Not one of the usual situations that have a specific code.

 

Why did TurboTax change? That I can't tell you.

JoshB1
Level 3

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?


I want to know if these are TT2020 software bugs? Are the 2020 Form 8949 and Schedule D correct and ok to file as is or should I be concerned and wait for fixes?


There are bugs - see here: https://ttlc.intuit.com/community/investments-and-rental-properties/discussion/espp-rsu-issues-on-tu... (hint: its not solved)

dgtax7
Level 2

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

@fanfare Thank you for your reply.  Maybe a better way for me to ask is "Does TurboTax care what code is used?"  since similar ESPP sale transactions were reported with O in one year and B the next year. 

And Form 8949 has variations from one year to the next. I'll wait a week or two for any subsequent TT2020 updates before I efile.

dgtax7
Level 2

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

@JoshB1 Thank you for your reply. I reviewed the post you pointed out. Very frustrating. I hope the issues are fixed very soon. Wish we had better transparency and visibility regarding TT changes and updates. I've been using TT for 15 years and this is the first time I've experienced problems with the software. I may be looking at other tools next year!
At this point, I'll wait a week or two for any subsequent TT2020 updates before I efile.

JoshB1
Level 3

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

This seems to be resolved with the latest update from Intuit yesterday/today

 

I had to reimport everything from my brokerage and now 2020 looks like 2019 (and more correct) 

 

Intuit Thanks for wasting my time doing this process 4 or 5 times!

dgtax7
Level 2

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?

Thank you @JoshB1 

Filed prior to this update. With the latest update, I set up a dummy return to test it out. While the bottom line numbers match what I filed, Form 8949 seems to still report differently (2019 vs 2020).  Column h (gain/loss) is same, but columns e, f and g are reported differently for my ESPP sales. 

See example below:

column h (gain/loss) = column d (proceeds) minus column e (cost or other basis) minus column g (amount of adjustment) 

TT2020: 40  = 100 - 60 - 0   (column f adjustment code is B)   

TT2019: 40  = 100 - 50 - 10   (column f adjustment code is O) 

 

So what I filed seems to be correct from as far as the resulting final numbers, but the intermediate numbers are displayed differently.

 

Unfortunately, I, as well, have wasted too much time on this! :( 

 

 

JoshB1
Level 3

ESPP - Why did TT populate Form 8949 and Schedule D differently in TT2020 than in TT2019 for my ESPP stock sales?


@dgtax7 wrote:

Thank you @JoshB1 

Filed prior to this update. With the latest update, I set up a dummy return to test it out. While the bottom line numbers match what I filed, Form 8949 seems to still report differently (2019 vs 2020).  Column h (gain/loss) is same, but columns e, f and g are reported differently for my ESPP sales. 

See example below:

column h (gain/loss) = column d (proceeds) minus column e (cost or other basis) minus column g (amount of adjustment) 

TT2020: 40  = 100 - 60 - 0   (column f adjustment code is B)   

TT2019: 40  = 100 - 50 - 10   (column f adjustment code is O) 

 

So what I filed seems to be correct from as far as the resulting final numbers, but the intermediate numbers are displayed differently.

 

Unfortunately, I, as well, have wasted too much time on this! :( 

 

 


Yeah, it ultimately didn't change my return (same outcome in terms of refund for both fed/state) but it made all of my supporting documents much more cleaner and accurate (in my eyes) - I don't have 100+ adjustment side-documents and my 8949s look more correct to me - I'm sure it won't matter

 

But yes, I'd like to thank Intuit for wasting a good amount of my time trying to figure this garbage out

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