I sold ESPP and a small portion is dividend reinvestments. I already reported my DIV but the tool keeps asking me for lot info on the remaining dividends sold. Help!

[TomYoung · Accepted solution]

Stock purchased via dividend reinvestments, are not "ESPP" stock.  They are just plain vanilla "stocks", no different than stocks you might purchase through a broker.

I assume you're using the ESPP "guide me step by step" process.  Use that process only for the stock you did receive through the ESPP.

You can report the rest of the sale by using the standard TurboTax "fill in the boxes" 1099-B interview.

It's perfectly OK to break one sale into different sales in this fashion.  Check to be sure that the proceeds of the two sales when added together come back to the proceeds reported on the 1099-B.

Tom Young

[cruedin]

May I ask a follow up to this? When you break apart the portion that was Dividend reinvestment from ESPP, do we also then adjust the percentage for "gross Proceeds" and "cost basis" to reflect the split, or leave it as printed on the 1099-B?

[TomYoung]

The percentage of proceeds is divided up according to the shares sold.  If 100 shares were sold at $10 per share and 7 of those shares were received via dividend reinvestment, the you'd report one with $70 of proceeds and the other sale with $930 of proceeds.

The cost basis here is a little more difficult as the 1099-B cost basis figure, (assuming it's reporting "basis" for all 100 shares), most likely has an INCORRECT basis for the ESPP shares.  That's because the broker only needs to reported the discounted price paid and not the correct price which includes any compensation income created by the sale.  In this case you should subtract out from the reported basis the actual price paid for the reinvested shares.  So if the broker reported, say $700 of basis for all the shares sold, but you know the reinvested shares totaled up to a basis of $80, you'd report the $80 for the sale of the 7 shares and $620 for the sale of the ESPP shares.

[cruedin]

got it! Thank you for the detailed explanation, it is exactly what I needed. I get it.