ESPP/RSU issues on Turbo Tax 2020

[torchill]

When I try to enter my tax information I keep getting the wrong results.  All the tax is going into capital gains vs. some into my ordinary income (already reported in my W2).  It also keeps stating that the stock is NOT company stock even though it was an ESPP or RSU.  I just updated turbo tax and it state schedule D is done.  What am I either doing wrong or when will this be fixed?

[TomD8]

The "1 Best Answer" to this previous TT question should be of help:

Solved: I sold stock a mix of RSU, ESPP, and dividend rein... (intuit.com)

[torchill]

Thanks for the info.  I wish it would have helped, but it didn't for my specific case.  Note: I am not an expert; however, I have been using turbo tax and the ESPP feature for >10 years and understand the tax implications for short term very well, not as much for long term, but know enough to understand something seem fishy...

After more playing around I think there is an issue with the windows version of turbo tax.  Here is why:

The cost basis used has NOTHING to do with what I put into the ESPP template.  It ONLY uses what I am FORCED to put into the first page Before I state it is an ESPP sale.  Now that is fine for the stuff that is short term as the ordinary income (that gets me to the cost basis) is reported in my W2.  So as long as that is correct (it is.) everything works OK; however, I do NOT get (as I did in past years) the check of how much income should have been reported in my W2 (so still think something is wrong...) So the gain (logged as short term capital gain) is the amount over the cost basis. Again correct for short term sales.  

Also, when I enter in a second sale of ESPP ALL the information from the first vest is already IN the ESPP area.  So I believe there is an error in how things are being used.  In past years I could enter ZERO in the cost basis (or skip entering it) and the ESPP forms would automatically update the cost basis based of what I put in for the vesting information ( this is NOT happening this year.)  Also when I complete, even though I clearly state it is an ESPP sale in the questions it states it is NOT a company sale (i.e. not an ESPP sale!!!)

The issue is the long term sales also use that COST basis from the first page (which I DO NOT HAVE) and even if I did it would push ALL of the gain into LONG term capital gains.  I know that this is NOT right as some of the gain should be included in the Ordinary income.  But since the ESPP forms are NOT changing anything and I don't have a cost basis, it is impossible to get the right outcome.  I had the same situation last year and I input the same sale into my 2019 Turbo tax and I get a different result on tax implications!!!! So for sure something is different and wrong and since it is putting ALL gain in the long term into capital gains it makes me think that the 2020 turbo tax has an issue for ESPP.  Note I see similar issues on RSUs, but haven't played around enough for that.

[TomD8]

@TomYoung -- Can you assist?

[TomYoung]

@torchill 

I ceased being a SuperUser when when Intuit switched from SUs to the "Champion" program, so I'm not going to take a deep dive here, but I'll mention a few "top of mind" thoughts.

1. The TurboTax 2020 program is completely capable of properly reporting the sales of stock acquired via an ESPP if you enter the sale correctly, a process TurboTax made more tricky a few years back.   This isn't a "TurboTax 2020" issue.
2. The page that comes up asking about what's been reported on your W-2 comes up as the very last page of the "Stocks, Mutual Funds, Bonds, Other" interview, it doesn't come up when you enter your last security sale.  You have to keep going with the interview,  hitting "Continue" or whatever until you come to that page.
3. Some years back TurboTax changed how that page works.  The way it used to work was that TT said "here's the ordinary income we've calculated from your ESPP sales, how much of this is already reported on your W-2?"  TurboTax had a box on that page where you could enter that number, (most commonly that number reported on the W-2 would be associated with short term sales only), and if you had compensation associated with long term sales, TurboTax would include the difference on your income tax return as compensation income.  That box in no longer on that page.  Now, when TurboTax tells you how much compensation it's calculated you can only answer "Yes this is on my W-2" or "No this isn't on my W-2."  So if your ESPP sales are both long term and short term and both classes of sales created compensation, neither answer is correct.

This last issue can be circumvented in about 3 different ways and I posted those workarounds many times since TurboTax changed things.  I think if you look around in the forum you should be able to find one of those posts and figure this out.

(torchill: I had some problem following your post so maybe posting the details of one problem sale - complete with screenshots - might help somebody grasp the issue in a more tangible way. )

[torchill · Accepted solution]

This IS a Turbo Tax 2020 issue on the download Windows Premier version.  I can't comment about web version as the software is slightly different (or so I was told).

The interface is NOT recognizing that these are ESPP sales and so the ESPP data is being ignored and it is being treated as a regular stock sale!!!  So they found an error in the forms being populated (i.e. NOT My input issue!!!)

I have talked with Turbo tax and they have agreed that it is an issue and they will have to address it in future releases.

[TomYoung]

@torchill 

You may very well be right about the "2020" aspect.  For some reason I was thinking that you were really referring to the 2019 tax year, and that's the way I was responding.  I haven't even looked at the "tax year 2020" TurboTax program at this point. 

I expect this might be an "early-season" bug.

Sorry for the confusion.

[torchill]

Yes Turbo tax told me that they agree it is an issue with at least the windows version and they have to fix it and release an update in the future!!!

Yes, for short term ESPP sales, I don't think this will be much of a real issue (the checks might not work, i.e. the question is $XXX reported in your W2 will not show up); however, brokers are required to have the correct cost basis, so since that is input on the sale screen (before inputting ESPP) it should all work out the same. 

The issue is the long term ESPP,  and I also have some SPP (previous program from ESPP) from long enough ago that the broker doesn't have a cost basis and even if they did the ordinary income would not be reflected correctly since it would not have been in W2 and then Turbo Tax2020 isn't calculating it at all (until fixed.)

To counter this For now (just to understand roughly what I should owe) I made a fake virtual short term stock sale to cover that ordinary income (which I will delete and update ESPP info once it is fixed.)

[annieland]

Ok this has been making me insane all week too.  I'm on the Mac download version and I understood how to enter ESPP sales in TT 2019, and the whole "guide me" interview worked.  In this 2020 version I am getting all sorts of weird outputs, including it erasing the name of the employer even after selected, $0's showing up all over the summary screen, and having to just do a manual adjustment that sometimes doesn't "take" consistently across Cap g/l adjustment worksheets for multiple sales of the same purchase lot.

Even after selecting "My cost basis is incorrect" and entering the adjusted basis from E*Trade (and my own records), I have to go back to the 1099-B worksheet because it's covered in yellow box errors.

I really hope this is all a bug and is fixed soon.  If not, I'm sure I can just manually fill it all out, but ugh, it's annoying.

[ryan-p-abraham]

I have this same exact problem . I can't enter and RSU or ESPP.

Also why did they change the interface from 2019 ... The first thing it should ask you is if you are doing an ESPP or a RSU transaction like it did in 2019. It should not force you to enter the cost basis and other things you don't now for those sales.

This needs to be fixed . It is unusable like this. The whole reason I buy premier is for this one RSU/ESPP function and it is messed up .... 

[Owens204]

I'm dealing with this issue too.  How will we know when it's fixed?  Do we just have to keep trying???  Ugh!!!

[annieland]

Probably, and now I'm in a bigger mess because I just randomly got 3 unexpected tax docs for an ISO from a former job of my husband, where part of an escrow amount was paid last April.  I need some help on trying to figure out cost basis entry for this and don't trust TT at all right now.  Ugh is right!!

[torchill · Accepted solution]

Trubotax does NOT care.  It took me over 3 hours and multiple phone calls to even get them to 1. admit there was an issue, 2. even care to put on their list to fix it.   The basically kept telling me it was my fault or to download my 1099 from the broker (doesn't solve the issues)... I was even told to enter the info directly in the forms (that was after the recognized it was an issue.) I told them If i have to do that I want a refund as I buy the software to make it easier and NOT to have input directly into forms.

The customer service is atrocious.  I have no idea what company would treat their customers so poorly.  I for one am done with Turbotax next year.  

NOTE: they told me that have NO intention of trying to solve this until mid February!!!  It might get done before; however, don't hold your breath...

[Owens204]

Thank you for the update.  It's crazy that they offered those solutions to you.  I guess I'll just keep randomly trying to see if it works, and waste my time.

[annieland]

Wow, you're brave to have tried to get help from customer service!  Thank you for doing it for the rest of us :).  Sorry the answers you got suck though.  My ISO is showing the same errors as the ESPP and I haven't even started the RSU entries yet.  Should be a blast.