I sold Qualified Small Business Stock (QSBS) which is 100% exempt from taxes as per the Section 1202 exclusion. There was no 1099-B for this sale. Where do I report this?

[TomYoung]

@Josh_14 

Your post really isn't clear but I'm assuming that you are attempting to report the sale of QSBS, stock that you acquired from the vesting of RSUs.

There is no "Income Tax Return Reporting Requirement" that you use the RSU "guided" interview to report the sale of stock acquired via RSUs.  The stock you sold is plain-vanilla "stock" that's no different in any way from a stock you bought through your broker so don't use the RSU "guided" interview, use the regular 1099-B entry interview.  You will not encounter the "QSBS?" question using the RSU interview.

Simply tell TurboTax you "purchased" the stock at the date of vesting and at a per share basis that's the same as the per share "fair market value" your employer used to calculate the compensation created by the vesting.

[Josh_14]

Thanks @TomYoung ..

Edit: I've been working with 3 people from Intuit on solving this problem. I managed to get to a screen where it asks me what kind of stock was sold where I can specify small business stock, but it never gets to the screen where it asks me what kind of small business stock was sold. I was on the phone with a CPA from Intuit for an hour today who will call me back tomorrow hopefully with the answer.

[rhgodbole]

Thanks!

[tmhuff]

@Josh_14 - any solution from Intuit on this? Experiencing the same issue.

Thanks!

[TomYoung]

@tmhuff 

Josh_14's situation, as best I could make out, was that he was selling small business stock that he acquired due to the vesting of  RSUs, and was using the RSU "guided" interview, but was never asked about the "small business" aspect of the stock.

As I pointed out, the RSU guided interview simply doesn't ask that question.  My solution was to not use the RSU guided interview - there's no "Income Tax Reporting Requirement" to use that interview - and instead fill out the 1099-B exactly as it reads, click the "Guide me step by step" button, select the "uncommon situations" option, tell TurboTax you sold "Stock", tell TurboTax you "bought" the stock, enter the correct cost basis of the stock sold, (which isn't the $0 reported by the broker), and then you'll be asked if the stock you sold was small business stock.

[Josh_14]

@TomYoung @tmhuff As Tom said, my solution was to report a private sale of stock, not following the corporate/company/employee stock sale guide, and then the key was to have TurboTax guide you through the cost basis. That was the key for me was having it figure out cost basis, then it will ask if it is QSBS and when it was acquired.

[roberto1962]

I have self-employed version and trying to place a Section 1202 QSBS 1099-B in but the UNCOMMON SITUTATION does show up in the software anywhere. I get the tax break but software doesnt show. Why cant I see those screens?

[roberto1962]

OMG - THANK YOU!!!!!

[Josh_14]

@roberto1962did you get it figured out?

[earlyride5372]

So what you are telling me is that if the QSB proceeds were reported on a K-1, I have to lie to TurboTax and say that it is from a 1099B form?

[PantsMicGee]

This is now where I am...Have a k-1, not sure how to submit a QSBS sale through the 1099B.

[ThomasM125]

Qualified small business stock (QSBS) would consist of stock owned in a "C" corporation. A "C" corporation would not issue a schedule K-1, that is only used by partnerships, S corporations and trusts. So, unless you mean the issuer of the K-1 owned the stock, I don't think you are dealing with QSBS.

[PantsMicGee]

I guess we agree to disagree and I move into the next stages of "How do I do this on Turbo tax?"

[GeorgeM777]

We agree that Section 1202 of the IRC was enacted to incentivize investment in certain small businesses by permitting gain exclusion upon the sale of qualified small business stock (QSBS).   As a way of background,  for purposes of the QSBS exclusion, a QTB does not include performing services in certain fields: health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business in which the principal asset is the reputation or skill of one or more of its employees. 

Now, here are the steps to follow to enter your QSBS into TurboTax.  In the Federal section, under Wages & Income, scroll down the page and select Stocks, Mutual Funds...etc or a similar category.   After selecting Stocks, Mutual Funds...you may see a section about 1099-B, you can select no, because the next page(s) will give you the option to enter your sales information.  On the next page, you will see an a question regarding "what if I have small business stock."  You can click on the question to learn more about small business stock, or just continue through the application and enter your information when prompted.  

@PantsMiGee

[home_owner]

I exercised and sold employee stock options. The stock qualifies as small business stock. I received net (difference of selling and exercise price) as regular earnings on W-2. Can I claim exemption on these earnings as stock sold was QSBS? I couldn't find steps to do this since it is reported on W-2 in regular earnings.