1099-b has different lots than supplemental (and actual) lots sold for sale of ESPP stock

[bfall377]

Fidelity incorrectly reported1099-b with lots (sold) which are different from supplemental detail lots (sold) and lots imported from Fidelity. The latter were the actual lots sold. The total proceeds reported are correct however the total gain is wrong. Since it's more than just adjusting cost basis for a sale, do I stick with the reported (1099-b) information or use the actual lots sold from the supplemental detail.

[GeorgeM777]

Yes, use the Supplemental Information rather than the original 1099-B you received, at least for the transactions that have been updated through the Supplemental Information.  To the extent the Supplemental Information does not contain or update other information on your 1099-B, then for those transactions continue to refer to your original 1099-B.

Generally, the Supplemental Information form will contain information indicating why you are receiving such document, and how it should be used in connection with preparing your tax return.  If there is any information in your Supplemental Information that seems to suggest that it should not be used as a supplement to your 1099-B, follow-up with additional information so that we might better assist you.  However, Supplemental Information documents are meant to update information on your 1099-B that was not available to the brokerage firm at the time the original 1099-B was prepared and thus, it was necessary to send the Supplemental Information document.  Therefore, use the Supplemental Information.  

@bfall377

[bfall377]

Thanks for your reply. Just to be clear,  when none of the transactions/lots reported on the 1099-B match the transactions/lots on the supplemental details page, I need to use the 1099-B (regardless of its accuracy). Is that correct?

[GeorgeM777]

That depends.  Generally, the Supplemental Information will update specific trades and a taxpayer can identify the transaction that is being updated because the name of the security, and the shares purchased or sold, including the dates of purchases and sales, has not changed.  What has changed however is usually the price or the cost basis.  Additionally, there may be a security number (maybe a CUSIP number) on the 1099-B which matches the number on the Supplemental Information document and that is another way for a taxpayer to match the updated trades.  

Can you tell from the Supplemental Information whether it is a substitute for the entire 1099-B? It does not appear as if it is a substitute for the entire 1099-B and usually Supplemental Information documents are not meant to be complete substitutes such that a taxpayer can disregard the original 1099-B.  However, if there is some doubt as to the accuracy of the original 1099-B, can you provide additional information why you feel the original 1099-B may be inaccurate.  There could be some unique facts about your Supplement which require much closer scrutiny.  

@bfall377

[bfall377]

As you can see the quantity and the date of 'acquisition' / 'date acquired' are totally different. Only the  proceeds are the same between 1099-b and supplemental page (which shows the correct lots sold). Therefore, I do not see any way to adjust the 1099-b because there are more variables than just price and cost basis. For what its worth, this is ESPP stock. Thanks

@GeorgeM777 

[GeorgeM777 · Accepted solution]

Given the additional information, it appears reasonable to use the Supplemental Information to prepare your return regarding the ESPP sales.  You are correct in that the acquisition dates vary in that the 1099-B reflects acquisition dates in the range of October 2013 - January 2014, whereas the Supplemental Information reflects acquisition dates in the range of August 2013 - November 2013.  The sale dates are the same in both documents and all sales are long-term.  The difference in capital gain is $104.  

Absent another updated Supplemental Information, use the Supplemental Information to prepare your return. 

@bfall377