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Level 3

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

Dear Experts,

I am using TT Premier. When I imported my ETrade tax forms, it just entered the cost basis from it. But my tax consultant seems to have entered Adjusted cost basis for those ESPP sales. Which one is right?  They are just straight forward ESPP sales. 

1099-B says:

Report on Form 8949, Part II with Box D checked,

Box 12: Basis Reported to the IRS,

Box 5: Box Not Checked (Covered Security)

Box 2: Type of Gain or Loss −Long−Term

Box 6: Gross Proceeds

1 Best answer

Accepted Solutions
Level 12

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

"But my tax consultant seems to have entered Adjusted cost basis for those ESPP sales. Which one is right? "

 

Your tax guy has it right.  The sale of stock acquired via an ESPP can create compensation income.  This compensation income is added to your (discounted) "out of pocket" cost of the stock.  I assume that's what your tax guy did.

 

"They are just straight forward ESPP sales."

 

There's nothing "straight forward" about properly calculating the basis of stock acquired via an ESPP.  I mentioned that sales of stock so acquired can create compensation income but the calculation of "compensation" depends on whether the sale is a "Qualified" or "Disqualified" disposition.  Very seldom can you enter the sale of this stock with a simple "here's what I paid for it" basis.

 

Your sale might be a Qualified disposition - the stock was sold more than two years after the grant date and more that one year after the purchase date - and, presumably, your tax guy knows the rules (or the program he used to enter the data does).

 

View solution in original post

4 Replies
Level 12

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

"But my tax consultant seems to have entered Adjusted cost basis for those ESPP sales. Which one is right? "

 

Your tax guy has it right.  The sale of stock acquired via an ESPP can create compensation income.  This compensation income is added to your (discounted) "out of pocket" cost of the stock.  I assume that's what your tax guy did.

 

"They are just straight forward ESPP sales."

 

There's nothing "straight forward" about properly calculating the basis of stock acquired via an ESPP.  I mentioned that sales of stock so acquired can create compensation income but the calculation of "compensation" depends on whether the sale is a "Qualified" or "Disqualified" disposition.  Very seldom can you enter the sale of this stock with a simple "here's what I paid for it" basis.

 

Your sale might be a Qualified disposition - the stock was sold more than two years after the grant date and more that one year after the purchase date - and, presumably, your tax guy knows the rules (or the program he used to enter the data does).

 

View solution in original post

Returning Member

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

what hell why can't this get solved

Level 12

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

@Davvey69 

 

I think I solved it, though I don't really know what you mean by "this."

Level 3

Should I enter Adjusted cost basis or cost basis from my 1099-B from ETrade for ESPP?

Thank you TomYoung. That was very helpful.

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