My employer stock and retirement funds are with Fidelity and due to confusion about being perceived to be a non-resident for tax purposes, I've been receiving a 1042-S form for the past 2 years. Unfortunately, in 2022 I also made an option transaction as follows:
- Sold a call contract on 08/24 and received a premium of $22.31
- From this amount, a $5.35 tax was withheld (at a rate of 24% I believe). The rest of the amount was transferred to the cash part of my portfolio
- I bought back the contract on 08/26 for $4.03 and made a net profit of $18.28
This transaction isn't reflected on the 1042-S. Fidelity doesn't seem to have a clue as to whether I'll receive a tax document with this transaction or not. Some representatives think I will receive a grantor letter showing this, while some say the letter won't show this. Some also say that the transaction has not been reported to the IRS and that I won't receive a grantor letter, which seems insane to think about.
My questions are these:
- What is a grantor letter in this case and does it apply to me? If it does and I receive it, how do I use it to file taxes on TurboTax premium?
- Can I use my statement for the month of August to file this stock transaction myself? I tried adding the transaction without a 1099-B on TurboTax with a cost basis of $4.03 and gross proceeds of $22.31. The sale date was 08/26 and the buy date was 08/24. I also stated that $5.35 Federal Tax was withheld. I live in WA where I don't have state tax. The August statement shows that tax was withheld and not whether it was state or federal tax. The 1042-S form also has my old address in MA and I suspect that's just an error on their part and that I don't owe any taxes to MA as I didn't even live there during 2022. 1042-S has amounts only on Federal Tax withheld, so I believe I just owe Federal Taxes here.
- Can I indicate this as a Short Term covered transaction? I don't know if Fidelity has reported the transaction and the cost basis and it'd be ridiculous if they don't. Will there be a discrepancy if Fidelity doesn't report it?
- Also, if my way of reporting it is right, will I get an error later as the sale date is before the buy date? I haven't gotten one yet, but if I do, should I flip those dates?
- Is it valid to report a transaction without a corresponding tax statement that shows it? Can I use TurboTax to file my taxes and do I need to keep a copy of my monthly statements for this purpose?
I know it's a complicated question, but any help would be appreciated.
@DaveF1006, @DanaB27, @SharonD007, @JohnW152, @tagteam
