How to record a negative number on form 8949 column (e) cost basis?

Turbo tax does not allow negative numbers in 1099-B box 1d

 

Some brokers  now reports losses of short options on 1099B as a negative number for proceeds in box 1d and a zero value for cost basis, rather than separate values for cost basis and proceeds that show a loss. 

 

The broker explanation is: "We are now updating our reporting of short options on the 1099-B to reflect how the IRS is now requesting that these transactions be reported.  In this new format, the cost basis and proceeds for short options is consolidated into Box 1d in a net amount."

 

To be able to post a negative value to form 1099-B box 1d follow these steps.

1. Select the option for a 1099-B
2. Select to type it yourself
3. Enter Bank
4. I'll enter one sale at a time
5. Enter the stock data and leave 10d BLANK
6. When you hit Continue you will get a RED error message
7. At the bottom of the screen select Allow me to continue with incomplete information. [Continue]
8. Any less common items will be blank.  Select Done
9. No this is not employee stock
10. Select the last item An adjustment is required for reasons not already covered.
11. Enter the negative number that you had in Box 1d.
12. This will complete the transaction.

Unfortunately, it did not work for me. Thank you for your immediate response.

Faisal Abu Kaud

Enter the cost basis as "0", and increase the sale proceeds amount by the absolute value of the "negative"cost basis - this will result in the correct gain calculation.

 

Example:

 

If the reported proceeds are $100 and the reported cost basis was $(50), your gain would be $150 ----- $100 minus $(50)

 

Using the workaround, enter the proceeds as $150 and cost basis as $0. Your calculated gain would still be $150 ------ $150 minus $0

 

You are correct that the program will not accept a negative value for the cost basis; by definition you cannot have a negative cost basis without some equal, offsetting gain.