What is the correct cost basis to report for stock appreciation rights converted to shares and then sold? It appears the basis reported by my broker is wrong

[TomYoung · Accepted solution]

Yes, it's wrong; probably reported as $0.  But I'm sure the broker provided some supplement information that tells you the correct basis to use.

Enter the 1099-B as it reads on the default 1099-B entry form but then click on the "I'll enter additional info on my own" blue button.  On the next page enter the correct basis in the "Corrected cost basis" box.  The correct basis is (number of shares sold) x (correct per share basis, which includes the compensation per share)

TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.

The correct per share basis is the same as the per share "fair market value" used by the employer to calculate the compensation reported on your W-2.

Tom Young

[DeskJockey88]

Yes I had some reported as zero and some as much lower than what appears to be correct, and yes the supplemental info does look correct.  Thanks, I was wondering whether I should add the corrected cost basis info on the next screen, I will do so.