Using turbo tax premier how do I adjust cost basis...
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chrisl_121756
Returning Member

Using turbo tax premier how do I adjust cost basis for employee stock options that appear on my W2 as income?

I'm using Turbo tax premier 2019 and I sold my employee stock options (ISOs). My W2 shows them as income, and how do I adjust the cost basis for the stock options that I sold, so I don't get taxed twice on them? 

 

If I import my 1099-B from Etrade all I can do is adjust the basis on the 1099-B page. Which works just fine to make the adjustment, but is that the correct way to do it? If I go to "forms" the 1099B work sheet only shows two of my transactions. Should I enter all the transactions manually, so it can show the basis reported by Etrade and the corrected basis that I entered? From reading it seems like turbox tax online can handle this, should I switch?

Thanks in advance!

Chris

3 Replies
TomYoung
Level 13

Using turbo tax premier how do I adjust cost basis for employee stock options that appear on my W2 as income?

"From reading it seems like turbox tax online can handle this, should I switch?"

 

I assume that you are using the desktop product based on your statement.  I'd stick with the desktop product because it can handle all stock trades just fine.

 

I'll assume that you both exercised the ISO and sold all the stock so acquired in 2019.  That eliminates the need to use the ISO "guided" stock sale interview.

 

The "most" correct way to enter this sale - and I'm also assuming you do know the correct cost basis which almost certainly isn't the W-2 income number - is to enter the 1099-B exactly as it reads, wrong basis and all, on the "normal stock sale" entry form.  Then click the blue "I'll enter additional info on my own button" and on the new window that shows up under the correct basis for the sale in the "Corrected cost basis" box.

 

That will eliminate the double taxation issue and post information on Form 8949 in "IRS prescribed" fashion, i.e., the broker's basis will be there as well as you adjustment to that basis, along with an adjustment code.,

 

You certainly can simply enter the correct basis on the "normal stock sale" entry form instead of the (incorrect) basis provided by the broker.  That method also states you income correctly and stating your income correctly is your prime responsibility as a taxpayer.

Critter-3
Level 15

Using turbo tax premier how do I adjust cost basis for employee stock options that appear on my W2 as income?

Because the sale shows on the W-2  the sale shows on the Sch D/form 8949 usually as a loss by the amount of the broker's transaction fee ... thus you are only taxed once.

chrisl_121756
Returning Member

Using turbo tax premier how do I adjust cost basis for employee stock options that appear on my W2 as income?

I agree and you have to make the manual adjustment. I found that can be effected through 1099B work sheet where you can put in a correct value.

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