possible bug - 1099B for options Sell

[sanash]

option sell can have the negative cost acquisition. The system does not pick up while importing the 1099B and it neither allows manual correction as it expects at least 0 in that field. I think its a bug and needs to be resolved as it it very much possible to have the 

Box 1e - Cost or other basis  = (-100) and 

Box 1d - Proceeds = 0

Gain = +100

System, after importing, asks to review these items. 

[Mike9241]

There is apparently an issue with the import file the broker provides.  there can be no negative cost. what you have on a short sale is proceeds.  then if it lapses it has zero cost resulting in gain.  if you close out the short sale with a purchase the that should be the cost the broker is reporting. if the option is excercised the procced are supposed to be add to the proceeds from selling the stock.  

[fanfare]

My broker does similarly, but puts negative amount in proceeds, and zero in cost.

My tax software accepts this, but will not allow a negative amount in cost.

BUT

e-File would not work with negative proceeds on Schedule D. This was a known problem and

IRS suggested a work around to tax software providers so the e-File could go through.

Perhaps that problem has been fixed by now.

Schedule D is supposed to allow a negative proceeds and you should be able to e-File.

@sanash 

cc: @Mike9241 

[Mike9241]

@fanfare @sanash my brokers do the opposite for short sales. proceeds are positive on 1099-B as is cost if they are closed out, so I have no issue with import or e-filing.  to me negative proceeds when you actually received them seems illogical.   also, as you pointed out negative cost is not allowed so if i sold for 10000 and closed out for 8000 there's a problem in showing the proper 2000 gain. if I show negative proceeds, desktop version, and assuming no cost - option expired, instead of a 10000 gain I have a 10000 loss. An extremely huge problem

[fanfare]

In the example I have from my broker, the transaction did result in a loss.

[Mike9241]

if you sold short and the proceeds from the short sale exceed the cost to close or the option lapsed, then you see the problem you have a gain not a loss. BIG BIG BUG.