TurboTax 2020 refuses to correct cost basis for ESPP

[jack133]

I wasted 3 hours today-14 ESPP entries.  I put them all in, did not look right, deleted, tried again.  Used Google and found this and the other thread.  Same issue as the rest of you.  I have been using TT doing ESPP adjustments for many years.  Really unhappy with Turbo Tax this year.

[drewbren]

I'm seeing the same bug, thanks for reporting it. I hope we get a reply soon. 

I'll include a few more details about the steps I followed and other issues I saw in the ESPP flow:

1. I originally tried to skip entering the Date Acquired, Cost Basis and Type of gain/loss in the beginning, since I knew I'd be choosing ESPP and it would get updated. 

2. I continued on through the flow and choose the ESPP option (which is hard to find every year BTW and it always seems to be slightly different)

3. I went through end entered all the ESPP info and thought it was working (I didn't notice until the last of my ESPP entries that it wasn't updating the cost basis until much later).

4. It said I was still missing info, so I went ahead and started adding Date Acquired, Cost Basis and Type of gain/loss to each of the entries (this is probably supposed to be entered automatically by the ESPP wizard but wasn't). 

5. I went back through the ESPP wizard each time I opened each entry to add Date Acquired, Cost Basis and Type of gain/loss, and I noticed that my ESPP info (Date granted, Date exercised, etc...) wasn't saved. Instead, it was auto-populating the whatever set of ESPP info I entered previously (I thought this was a feature at first, since it was nice when I chose sales that happened at the same time, I only had to enter it once). However, when going through again, I saw that it hadn't saved that info at all, but was always just showing me the info I had entered on the previous entry.

6. After updating most of the ESPP entries this way a 2nd time, I realized that it was telling me that my cost basis was $0 and something was not right.

That's when I found this thread...

Anyway, hope the details I added help you track down the bug and get it fixed. The ESPP wizard is the only reason I buy the Premium version of TurboTax every year. I shudder to think about how long it would take to do ESPP sales on paper.  Please TurboTax fix this quickly so we can all get our taxes finished. Thanks!

[Steven101]

Same problem here.  I was told by a tech support expert at Turbotax that it's not that he doesn't want to help us, it's that he can't.  Not allowed to.  Additionally, a Turbotax product expert informed me that our comments on this community forum are in a vaccum to let us air our grievance so that we feel good and that no one from corporate looks at these posts.  Does anyone know anyone we can all contact at Turbotax corportate?  Or maybe we could proceed with a complaint to the IRS because Turbotax is taking our money and not following IRS protocols and recommendations.  In my case, the IRS recommended to just leave the line blank.  But Turbotax keeps automatically rounding my blank entry to a zero.  Which is not permitted.  By Turbotax.  So, anyone out there who has the contacts, please post the names and addresses and I will write to them.  Also, sign me up for a class action suit against Turbotax.

[DVE]

This seems to be fixed in the latest update.

[garyericson]

As others have said, it looks like the latest update corrected this. Except, when we entered everything ourselves and the problem was still present. But when we let TurboTax walk us through the steps, then it transferred the data correctly to the form. So it's about half-fixed, but half is better than none.

We're double-checking every little calculation now, and wondering if we'll use a tax accountant next year if we can't trust TurboTax to do the work correctly.

[drbjmoore]

Do you have a PC those that said it’s working?  I have a Mac and it is still not corrected 

[DVE]

I have a Mac, but I run TurboTax and Quicken products in a Windows Virtual Machine. The Mac products always seem to lag the PC products. 

[Marc G1]

Absolutely - this is a TurboTax error.  Here's what I found (sorry if too much info):

TurboTax is 'broken'. For the 1st time, I find that it is incorrectly calculating my income. In particular, the Capital Gains from Schedule D are being overstated because the cost basis for my ESPP sales is not picking up the 'adjusted cost basis'.

My ESPP sales are all short term covered (Box A).  When entering each of these sales, I entered the Box 1e cost basis as reported on my 1099-B, and then after reporting this as an ESPP sale, I made the appropriate cost basis adjustment (e.g. adding back the value from the employee discount). All calculations/details I could see through the entry process seemed to indicate that the cost basis was being adjusted correctly; the short term gains (losses) were consistent with the adjusted cost basis.  Part VII of the Employee Stock Worksheet (29 e. & 29 f.) reflects the correct adjusted cost basis & gain (loss).  However, the Cap Gain/Loss Adjustments Worksheet does NOT reflect the adjusted cost.  As a result, the Cost basis in Schedule D (Part I, 1b (e)) does NOT reflect the adjusted cost.

Bottom line is Turbo Tax is broke and if I don't make a manual adjustment, my calculated taxes will be too high.  And while I may be able to make manual adjustments in the 'Forms' section of TurboTax, I of course run the risk of creating another unknown error in TurboTax.

I'm hoping TurboTax sees this and fixes the bug!

[Marc G1]

I just tried and confirmed a manual entry override will work to correct for the adjusted cost basis:

I made manual adjustments in the Capital Gain/Loss Adjustments Worksheets for each of the ESPP sales (Box A short term covered) that I had.  In Part III, I checked the box for "Form 1099-B reports an incorrect basis (Code B). Corrected basis...." and I entered the correct adjusted cost basis (e.g. #shares purchased x last day Mkt value).  That in turn resulted in the Form 1099-B Worksheet (E-Trade) to reflect the cost basis adjustment and the corrected Gain (Loss) based on the adjusted cost basis.  This in turn resulted in Schedule D, Part 1 1b to reflect the cost adjustment and Gain (Loss) for the Box A ESPP sales.  And this in turn resulted in the correct Capital Gain (Loss) on Line 7 or Form 1040.

While this is good for now, I can only wonder what might happen if TurboTax corrects this bug before I actually file, and if so, might that some how 'double-correct' and result in a new error.  I'll need to check Line 7 on Form 1040 just prior to filing to be sure...

It seems like every year, dealing with Employee Stock (ESPP, RSUs, etc.) is a challenge in TurboTax.  This year appears to be the worst, in that it's actually broken.

Problem appears solved with the manual override.

[bobbyk12]

I have the exact same issue as MarcG1. Called TurboTax and was connected to a CPA in their customer service center. He confirmed I was correct about what should be reported on the forms and suggested a work around to make it work.  But I shouldn't have to go into the forms and manually enter the information! I usually trust TurboTax to do the correct calculation. I'm not sure why I decided to check the numbers this time, but if I hadn't, I'd be over paying my taxes and would have never known.

By the way, the update last Saturday did fix something, just not this. After updating, my taxes owed decreased (without me making any changes), but the error described above still exists.

[jack133]

It has been a few days.  Based on comments above, I gave another try.

I installed TT updates, did my 14 ESPP sale entries, and all correct. All as it should be.

Windows system with TT Amazon download version.

[drewbren]

Hi Jack,

I just tried again and while I am able to get through to the ESPP workflow, my original cost basis is never updated. It still says "Missing info". As a few people mentioned, I could manually enter it, based on the calculation in the ESPP workflow, and maybe that would work. Is that what you did or did it update all the information when you completed the ESPP workflow (ie. entering all the info from form 3922)?

I have tried updating existing ESPP sales, deleting everything and reimporting, and deleting everything and manually entering. All of them leave me with "Missing info". Just wanted to check to see what you were seeing. I am also using the Windows version.

Thanks,

-Andrew

[jack133]

Hi Andrew,

I used the step by step.  It worked this time.

Longer reply.

Several weeks ago with 14 ESPP entries-I do limit orders and found them being executed and reported on my 1099 in many small trades-50 shares sold in 3 trades, for example.

My first entry was good.  My second entry had many signs that Turbo Tax was screwed up, but I did all 14 thinking maybe magic would happen-nope, totally screwed up.  I deleted all and started over, still screwed up beginning second entry.  I did a search and found this forum.

When a poster said it was fixed, I deleted everything and started over again.  I updated Turbo Tax.  I did the step by step again-no red flags this time.  I did various checks and am satisfied that the Turbo Tax programming error is resolved and my ESPP reporting is correct.

Summary, step by step method of entry and it worked-after update installed.

Good luck,

Jack

[jack133]

Andrew-I reread your question.

My account as setup by my employer does not allow import-so I typed everything in.

Also, I could not find this year’s 3922-well, I did find documents labeled 3922, but they seemed not to have the relevant 3922 information.

So I told Turbo tax I did not have the 3922 forms and used that method of entry.  I have all the necessary tax data from my broker-just not on 3922 forms.

This should not matter, but I wanted to clarify that I inputted into TT different than you are attempting-no data import, and I answered no to the 3922 question.

Jack

[drewbren]

Hi Jack,

Appreciate all the details, I will explore a bit more tonight and see if maybe saying no to the 3922 question makes a difference. I am still hoping to hear back from the CPA who was investigating the issue when I called in a week or so ago too. I wonder if there is still another fix in the works.

Thanks,

-Andrew