Imported stock sale has wrong (non-reported) cost basis. How to fix?

[tangofan]

My 1099-B imported from my broker has one stock sale for which box E (Long-term sales with cost basis NOT reported to IRS) is checked. However that cost basis is also wrong, since the stock underwent some spin-off that were apparently not tracked (or tracked the wrong way).

I can see two ways to fix this in TT Deluxe for Windows:

1. Just overwrite the wrong amount Box 1e (Cost or other basis) of the entry form with the correct amount.

2. Leave the false amount (reported by my broker) in Box 1e and then a few pages later check the option "The cost basis ion my statement is incorrect" and enter there the correct amount.

I suppose that for a transaction for which the cost basis was reported I'd always use option #2, however in this case the cost basis has not been reported, so can I just use option #1 instead?

[ThomasM125]

You should use the option 2, since the IRS may want to match the cost basis reported on the form 1099-B to the entry on your tax return. Here are the steps in TurboTax:

1. Choose the Federal option on your left menu bar
2. Choose Wages & Income
3. Choose the Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) option
4. Choose the Stocks, Bonds, Mutual Funds option
5. Enter your Form 1099-B information and check the box  that says "The cost basis is incorrect or missing on my 1099-B" and you will see an option later to enter the correct cost basis