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mark121281
Level 1

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

 
44 Replies
KrisD15
Employee Tax Expert

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Apparently the company sells shares monthly to pay it's fees. 

The sales are income to you even though you never see the proceeds, instead they are used to pay the fees. 

 

Below is a link with more information:

 

1099 thread

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mark121281
Level 1

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Thanks for the feedback. I still dont know how to move on though. Turbo Tax keeps reminding me to review these "Gross proceeds investment expense" items but adding my cost basis or date of purchase does not help. Im stuck on this to file.

KrisD15
Employee Tax Expert

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

When you entered your basis, did you click "I need to adjust my total cost basis" and then selected any codes to go with it? 

Is this for gold? 

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mark121281
Level 1

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Its for GBTC (Bitcoin Trust). Small monthly expenses show up under a category on my 1099 as:


UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS [Ordinary gains or losses are identified in the Additional information column] (Line 5)
Report on Form 8949, Part I with Box B checked or Part II with Box E checked. Basis is NOT provided to the IRS. (Line 12)
“Date acquired,” “Cost or other basis,” "Accrued market discount," "Wash sale loss disallowed" and “Gain or loss (-)” are NOT reported to the IRS.

Turbo Tax sends me to a page with:

Sales section title

This contains keywords like: short term, long-term, reported, not reported, covered, and not covered.Covered and reported mean the same thing.
Example: Short-term transactions for which basis is reported to IRS.

And then asks for sales info etc...  Even though this is not a sale.




AmyC
Employee Tax Expert

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

The company is selling your shares to pay expenses each month. These are sales. You must report them and you need to put in the basis for each of these sales.

 

The term not covered means the brokerage does not know your basis and you  must enter it.

Covered means the brokerage thinks they know your basis.

Reported means it has been reported to the IRS on a tax form, You have the tax form.

 

 

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Starry
Level 1

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

But how can I find out the cost basis of the "Gross proceeds investment expense"? It is not listed on the 1099. 

 

For me it is GLD and SLV. The form only listed the 1c date, Quantity is all 0, 1d- Proceeds & 6- Reported (G)ross or (N)et, Data acquired: NA. Then in Additional information it listed Principal payment Cost Basis Factor. How should I proceed?

parthchandak02
Level 1

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

I am having the same issue - please help! What do I do with the gross proceeds? They do not have a cost basis listed in my 1099. 

CatinaT1
Employee Tax Expert

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Please review the answers and links in this thread.  They will answer your question.

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mccshark
Level 2

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Why did you bother replying, you added no value.

Critter-3
Level 15

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

The sales are income to you even though you never see the proceeds, instead they are used to pay the fees. 

 

Below is a link with more information:

 

1099 thread

royandgiselle
New Member

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Just in case this helps anyone in the future, here's what I did (and I believe this is the right thing to do)...

 

Find out your purchase date (i.e. 01/01/2018) - the sale will remain in "Review" status unless you enter this.

Find out your earliest purchase price, since the default is First in, First out (FIFO) (i.e. $15)

Find out the number of shares. (i.e. 5000)

 

Your 1099 will look something like this:

11/24/20 0.000 24.81 N/A ... ... ... Principal payment 16 Cost Basis Factor: 0.[removed]

 

So to calculate your cost basis, you do this:

(Share price) x (# of shares) x (Cost Basis Factor) = Cost Basis

 

In my example, it would look like this:

$15 x 5000 x 0.[removed] = $24.42

 

That means my gain/loss = 0.39 (or zero as far as IRS is concerned.)

I had over 60 of these transactions, so it was extremely tedious.

 

Hope this helps someone.

kire589
Level 2

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

 

This is interesting. I was wondering what that was for.

 

Are you sure that's how you use it?

 

I went through the GBTC Tax document (for 2021) and did all 6 steps - calculating pro rata ownership, cost basis, total proceeds, etc for each tax lot I had and it did not match with the total proceeds I had on my 1099-B. It was tedious. The total proceeds that I calculated (on Excel)  were fairly close (~$16) to the cumulative proceeds that Grayscale cumulatively reported though. In the end I calculated a capital loss. I must be doing something a little wrong. I'm trying to figure out how s factor

 

What I don't like about the Grayscale Tax document is that the proceeds are charged weekly---how do they come up with that number exactly?

For instance--

When calculating the cumulative proceeds, they outline how you calculate a transaction/tax lot from the purchase date till end of year (vs. calculating weekly proceeds for your tax lots that you've acquired up to the transaction/expense date). I'll probably have to get a tax advisor to figure it out.

 

DianeW777
Employee Tax Expert

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

Perhaps, however you seem to know all the details of your transactions and that's all it takes. As far as the $16 difference, you can add or subtract that from your gross proceeds to arrive at the correct total of sale proceeds reported on your Form 1099-B. You can use the 1099-B section to enter your cryptocurrency sale (see below). Repurchase is not part of the equation except when the repurchased items are sold at which time the cost basis is needed.  Any gain or loss from actual transfers/sales is reported regardless of what the funds were used for.

  • In TurboTax Online you will find Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) as a selection under Investment Income
  • In TurboTax CD/Download you will enter Cryptocurrency as a Stock, Mutual Funds, Bonds, Otherunder Investment Income
  • OR simply search for Cryptocurrency in the upper right 

Be prepared with the following information:

  • Service name (examples: Coinbase)
  • Asset name (examples: Bitcoin, Ethereum)
  • Date of purchase
  • Cost basis
  • Date of sale
  • Sale proceeds
  • Associated costs to buy and/or sell

You can do a summary of long term and then short term combinations (long term holding is more than one year, short term holding is one year or less).  Make one entry for each. You can then send the worksheets or statement with Form 8949 after your return is accepted, attached to Form 8453.

  • Sale date can be the last date a sale occurred or 12/31/2021
  • Purchase date can be 'Various' 

If you are e-filing your tax return, then mail your statements (including Form 1099-B), along with Form 8453 to: 

 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

 

If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).

Bphon2378
Level 2

My 1099 lists "Gross proceeds investment expense" and this is being listed as sales profits. How can this be fixed?

I'm in the same predicament.  I see what you did. My question is these are weekly fees from GBTC.  Shouldn't they be deductible since you are not profiting from the sale and they actually an "expense".  Right now, you're showing your cost basis and short/longterm gains.  How would you write this off as an expense since this was a fee by GBTC ?

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