Form 1099-B with no cost basis for ESPP shares - How do I account for LT Gain and Ordinary Income

[JoeBob1]

I have a 1099-B for ESPP shares I sold. All it shows is the number of shares, date sold, and proceeds. ComputerShare provided additional information showing the acquisition date, shares, reportable proceeds, cost basis, gain, gain type (all are long term), ordinary income, and Noncovered. How do I enter this into Turbo Tax Premier 2019 and what supporting documentation do I need to provide to the IRS assuming I must submit form 8949?

Thanks 

[Anonymous]

qualified or non-qualified (unqualified)?  there are different tax rules.  Don't know!  ask your employer. 

[TomYoung · Accepted solution]

Since ComputerShare indicated that the sale created ordinary income we know that this was a Qualified ESPP.  I'm assuming that all the sales are "Noncovered" and than none of the compensation was reported to you on a W-2.

IF you have Form(s) 3921 - "Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)" - for all the shares sold or know that information, THEN the easiest way to enter this information properly would be to use the ESPP "guided" sale interview that's available in the "Stocks, Mutual Funds, Bonds, Other" interview.  You'd indicate that the sales are Noncovered, follow the ESPP guided interview, and TurboTax will make the appropriate calculations as to gain or loss and will also calculate the compensation income created by the sale and will place all that information on Form 8949 as well as adding the compensation to line 1 of the Form 1040. 

If you go this route be sure to work all the way through the "Stocks, Mutual Funds, Bonds, Other" interview, don't simply stop when you've entered the 1099-B information.  The very last screen of the interview will indicate the amount of compensation TurboTax has calculated and ask you if the amount is included in your W-2.  If you answer "No" that's what prompts TurboTax to make the entry on line 1 of the Form 1040.

The other approach is to not use the ESPP guided interview and simply enter the trade(s) using the "normal" 1099-B interview.  Again, you'd indicate "Noncovered" and then enter the information provided by ComputerShare into the appropriate boxes.  This will get the capital gains and losses properly stated on Form 8949.  But you'll have to go another route to get the compensation included in your income tax return.

Starting the "Miscellaneous Income, 1099-A, 11099-C" interview.
Starting the "Other income not already reported on a Form W-2 or Form 1099" interview.
Answering "Yes" on the "Other Wages Received" page.
Entering $0 on the "Wages Earned as a Household Employee" page.
Entering $0 on the "Sick or Disability Pay" page.
Answering "Yes" on the "Any Other Earned Income" page.
Ticking "Other" on the "Enter Source of Other Earned Income" page.
Entering a description and an amount on the "Any Other Earned Income" page

There is no need to provide any supporting documentation with your income tax return.

[JoeBob1]

Thanks @TomYoung These were old stock purchases from between 2003 and 2005 so there are no 3921's. I'll spend some time going through your suggestions.