How do I enter a form 1099-B which shows the date sold in 2023 (when the company was acquired) , when TurboTax gives an error saying it must be in the current year?

[evelyn-chambers]

The company my husband works for was bought in 2023, and the employees are being paid for their stock over several years instead of all at once. Last year was fine, but this year it won't let me enter this date exactly as it is shown in the form. Do you I just fib and say 2024?

[Mike9241]

I think the sale may have been reported incorrectly in 2023. If it's not a publicly traded stock, then there were two options.

1) report the entire sales in 2023 including the future sales proceeds (excluding interest)  and you are done.

the future proceeds are reported in the year received but with a cost = to the proceeds so no gain or loss. or

2) use the installment sale method of reporting using form 6252. You report the total sales price and the tax basis. However, you are only taxed on a portion of the gain using the ratio of proceeds received to total proceeds received and to be received.

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for 2024, under option 2, you would enter the proceeds and interest received on the 6252

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for publicly traded stocks only option 1 is available

interest is taxable in the year received and you probably should received a 1099-INT

[evelyn-chambers]

Thanks for the reply.  This was stock options for a private company, which was acquired by a public company.  The public company paid a certain amount per share, with 50% paid the first year, then 17% each year for 3 more years.  We only received a 1099-B form from the firm that processed the payments, so I treated it like a regular long term capital gain the first time around.    I mean, that's essentially what it is, right?     There's no interest being paid on the remaining amount that is being paid out over the next 3 years, so it feels like each year is just a chunk of capital gains...  

Assuming I really do need to use 6252 (sigh...), does this mean I need to go back and amend my previous tax return before I can proceed with this year's return? 

[DianeW777]

Yes, that would  mean you should amend 2023, then include the installment, Form 6252 in each year you receive proceeds.

• How do I amend my federal tax return for a prior year?

Optional. If you did use your full cost basis in 2023, then you can report the amount received in 2024 as a capital gain by using zero cost basis. This taxes the gain (full amount received) in each future year.  You would have to enter a sale date of 2024, 2025, etc.

Since the stock was from a private company (not publicly traded), then you might consider using option 1 or 2 provided by Mike9241.

@evelyn-chambers