Which version of Turbo Tax should I use for stock market trades that include option covered calls?

[model4sun]

I used the free version last year (for 2020) but it had problems with some options trades.

I sold covered calls which are later bought to close.  This means that the sale is first and the buy (to close) is later.  The free version could not do this.  It could not reach the completion to E-file.   Even with support from your accountant that tried to help me I was told I would have to print it all out and submit the return by mail.

If I can't use the free version which version do you recommend?  I also want to know what levels of live accountant support is included and what the current cost is.

Thanks

[HelenC12]

Stocks, bonds, mutual funds and other securities are investments. When you sell stocks, bonds, mutual funds, or other securities, you should get Form 1099-B from your brokerage. Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) reports the sale of stocks, bonds, mutual funds, and other securities. 

If you can't use the free version, below are the versions you may use:

• TurboTax Online Premier,
• TurboTax Online Live Premier,
• TurboTax Online Self-Employed,
• TurboTax Online Live Self-Employed (online), and
• all personal CD/Download versions of TurboTax.

Only the online versions of TurboTax offer live support. To get the cost of Live and the cost of Live Full Service, click here.

With TurboTax Live, you'll get:

• Product support from a TurboTax specialist,
• Unlimited expert advise on investment and more,
• An expert final review before you file,
• Access to tax experts all year.

[model4sun]

The main problem I had was

"   I used the free version last year (for 2020) but it had problems with some options trades.

I sold covered calls which are later bought to close.  This means that the sale is first and the buy (to close) is later.  The free version could not do this "

Which  version do I need to be able to do this?

I want the live support, so whilch online version should I use ?

Thanks

[EbonyL122824]

I'd recommend TurboTax Live Premier. You can begin by going here and selecting Premier.

[model4sun]

Is there a free version I can use to start my return and file for extension and then switch to the paid version later?

Your system showed a free version that can be used if filed before 3/31 is that one still working?

I am thinking about that one to file my extensions and then switch it later to a paid version.  Can I do that?

[CarissaM]

Yes you can do that. Form 4868 is the form you will use to file the extension. 

Form 4868 is included in all TurboTax forms as outlined here. 

Please let us know if you need assistance. 

[model4sun]

I did file for an extension with the free Turbo tax.

I got this is the email today:

" Dear Valued TurboTax Customer,
 
We’re reaching out to you because our records show that you prepaid for TurboTax while filing a federal tax extension. The good news is you already paid so all that is left are the final steps to finish and file your taxes today.
 
Please take the following actions to finish your return:

• Sign into TurboTax with your User ID.
• Select the Finish & File section.
• Follow the steps to complete your e-file.

  "

I'm sure I did not pre pay for anything.  

I plan to use one of the paid versions when I am ready to complete the tax return.

[Critter-3]

Ok ... take a moment to think about the generic message and not get hung up on the details.   If you used the FREE version to file the extension and registered the account  then technically you paid NOTHING but the program registered the account as being paid ... nothing more so don't fret on this distinction.  

[model4sun]

I started with the Free version just to file my extensions. 

Now I selected the deluxe version that is for investments.  $169 that is to be paid at the time of filing.

I am in my return but it shows that it is the free edition.

Is it supposed to update that later or if I sign out and then back in again.

[DoninGA]

---

@model4sun wrote:

I started with the Free version just to file my extensions. 

Now I selected the deluxe version that is for investments.  $169 that is to be paid at the time of filing.

I am in my return but it shows that it is the free edition.

Is it supposed to update that later or if I sign out and then back in again.

---

You mentioned $169.  That would indicate that you requested the TurboTax Premier Live online edition.  The Premier online editions are used to report investment gains and losses from sales of the investment.

Did you click on Upgrade on the left side of the online program screen?

See this TurboTax support FAQ for checking your fees - https://ttlc.intuit.com/community/charges-and-fees/help/how-do-i-review-my-fees-in-turbotax-online/0...

If you are using one of the Live online editions see this TurboTax support FAQ for contacting a Tax Expert - https://ttlc.intuit.com/turbotax-support/en-us/help-article/product-setup/connect-tax-expert-turbota...

[model4sun]

I see it still says free version.

I have to click on upgrade on the left panel!

I see it doesn't have the same choices such as deluxe for investments.

I see I have to choose the "live" version.

Now it shows that I have the upgraded version.

Thanks

[fanfare]

"This means that the sale is first and the buy (to close) is later."

@model4sun 

No.

In order to close a short you must go to the market and acquire some securities.

The acquired date is the date you closed the short sale.
For Stocks, the disposed date is two business days later (settlement).
Options settle in one day.

If you did not have a loss, the disposed date is the same as the acquired date.

Note to those for whom it is not obvious: Date Acquired and Date Disposed refer to Columns (b) and (c) on Form 8949 that you will report to the IRS.
Your trade date is the date you closed the position and goes in (b). Settlement date must be calculated taking into account weekends and market holidays.
From this you can see that a short is always a short term capital gain or loss, no matter how long you are short.

[Mike9241]

it should be noted that if the call is exercised then the broker adds the proceeds to the sales proceeds of the stock.  so there is only one sale and one purchase on the 1099-B  this can convert the proceeds from the short sale of the option to long-term if the stock is held long term. 

settlement date is only used on short sales where you report a loss.

see this link for reference https://www.justanswer.com/capital-gains-tax/bvhvv-when-last-date-taking-losses-stocks-stock.html#:~... 

[model4sun]

Last year I had a problem with covered calls that I sold and later bought back, either at a higher price than I sold it for or a lower price.

I used the free version last year and it had a problem with the sale first and buy later.  I had  TTAX  phone support but I had to file the return by mail because Turbo Tax could not do it.

This year I am using the online version that costs $169. I think its called premier.

Will I have this problem again with the upgraded version that includes phone support?

Thanks

[model4sun]

Spoiler

This is an actual trade that I made yesterday for a covered call contract for  EOG shares that I own.

It's like a short sale but the option is what was sold and I can buy it back later before expiration.

From my broker:  You sold to open 1 contract of EOG Dec 16 2022 123.5 Call at $11.41 on 10/04/2022.**

The bid and ask are  11.80  and 12.10, so I'm down a few dollars and I can buy it back if I think it's going in the wrong direction.

I own 100 shares so 1 call contract can be assigned 100 shares at the 123.5 price if it is in the money.

In this case I don't have to make any trade since it will be assigned on expiration date.

If it is not in the money it will expire worthless and I keep the $11.41 x 100.  I don't have to make any trade either.

If the call contract that I sold goes down in price I can buy to close and keep the profit at any time

If the call contract that I sold goes up in price I can buy buy to close and take the loss if I think it is better to own the shares.

It is  similar to a short but it is a hedge if I expect  the shares to go down.  

In either of these two cases the buy to close is after the sale to open.   This is the problem I had last year.  TTax showed the sale but was saying that the  buy date had to be before the sale date.   You can see that the sale is made and the buy did not happen yet. This year since I have the $169 premium version  I want to know how this is going to be handled.  And I will have your accountant support that comes with it.

Can you tell me what to expect your accountant to do or if the software will handle it correctly this time.