TurboTax Premier Desktop 2024 (2025 not yet functional) - Windows 11
Revision 12/23/25
- 2007 I retired and used the NUA option to transfer my shares of company stock from my 401k to my taxable brokerage account. I received a Form 1099-R and included the taxable amount/cost basis (Box 2a) in my 2007 return.
- April 2025, I sold a number of shares from my brokerage account where the proceeds equaled the Gross Distribution (Box 1) on the 1099-R.
- I reported that amount minus the cost basis (Box 2a) as a Long-Term Capital Gain (LTCG) in the TurboTax section titled Investment Income, Stock, Mutual Funds, etc.
Problem:
- TurboTax includes the LTCG from the NUA shares in calculating the 3.8% Net Investment Income Tax (NIIT) on line 17 of Form 8960. This carries over to Form 1040SR, Line 23.
- The LTCG from the shares of an NUA are not subject to the 3.8%. (Instructions for IRS 2024 Form 8960, Pg. 7).
Solution. It also passes the TurboTax Review and I can file electronically.
- Open Form 8960 WORKSHEET and go to the Section For Line 5b.
- On the bottom line titled "Net gain or loss from disposition of property not subject to net investment tax", enter the value of the NUA from Box 6 of your 1099-R.
- This becomes a negative number on Form 8960, Line 5b.
- The resulting NIIT calculation on Form 8960, Line 17 is correct and carries over to Form 1040SR, Line 23.
- Entering the value anywhere else results in an error message during the review.
I invite your feedback...
Romper
