How do I report in Turbo Tax capital gains from sale of stock after NUA transaction in 2018 where part of gain from subsequent sale is short-term and part is long-term?

[aldahlstrom]

Example of situation:  One share of stock with basis of $15 due to NUA had value of $300 at time of NUA transaction, then was sold 2 months later for $400.  $285 of gain should be long term and $100 (appreciation after NUA transaction) should be short term.  It's one single sale with two holding periods.  Not sure how to reflect this on tax forms.  1099-B from broker just shows as all short term.

[TomYoung · Accepted solution]

You simply have to make the determination as to the correct reporting and break that one sale into two sales, one short term, one long term.  You just make sure that the proceeds and basis of the two sales comes to the correct total for each item.

Tom Young

[aldahlstrom]

If I break the sale up, it won't match how broker reported on 1099-B.  
Example of situation:  One share of stock with basis of $15 due to NUA had value of $300 at time of NUA transaction, then was sold 2 months later for $400.  $285 of gain should be long term and $100 (appreciation after NUA transaction) should be short term.  It's one single sale with two holding periods.  Not sure how to reflect this on tax forms.  1099-B from broker just shows as all short term.

[TomYoung]

Look at the pictures attached to my answer.  I assumed the broker reported short term noncovered; you may have other corrections if the broker reported some basis.  But your obligation as a taxpayer is to report your income CORRECTLY.  Your obligation is NOT to slavishly obey a little piece of government-approved piece of paper, a piece of paper that's WRONG.

[oregondeere]

Hello Tom,   

I have this exact same question regarding how to break up the sale post a NUA into Short and long term. Unfortunately on the forum pictures are not shown.  Do you still have the example pictures?  I'm including the previous point that was included. "If I break the sale up, it won't match how broker reported on 1099-B.  
Example of situation:  One share of stock with basis of $15 due to NUA had value of $300 at time of NUA transaction, then was sold 2 months later for $400.  $285 of gain should be long term and $100 (appreciation after NUA transaction) should be short term.  It's one single sale with two holding periods.  Not sure how to reflect this on tax forms.  1099-B from broker just shows as all short term."

Thanks, 

[jjschumac]

So I received a 1099R with some NUA.  question: Do I have to report the sale of the stock (NUA) on form 8949? An example: 1099R - $400 total, taxable $100, NUA $300.  Turbo tax correctly recorded $100 as taxable but didn't do anything with the $300NUA.  I think I have to report that on form 8949. Thanks Jeff

[MaryM428]

Net unrealized appreciation (NUA). Normally, NUA in employer securities received as part of a lump-sum distribution isn't taxable until the securities are sold. However, you can elect to include NUA in taxable income in the year received. The total amount to report as NUA should be shown in Form 1099-R, box 6.

[jjschumac]

Thanks for the reply.  They sold the stock and sent me the lump some and a 1099R.  They did not sent me a 8949.  So my question was do I have to make a manual entry in Schedule C for the NIU as a long term capital gain.  Thanks, Jeff

[MarilynG1]

@jjschumac If you did not receive a 1099-B to report the stock sale, you can enter your Capital Gains without one.

Click this link for more info on Capital Gains on 1099-R. 

This link has info for Reporting Capital Gains without Form 1099-B.