Where to enter Proceeds from Sale of Rights for a stock?

[pbs2bz]

Hello,

I own shares of XYZ stock.  I received $169 for the Proceeds from Sale of Rights (I sold my rights to purchase shares at a future date for a certain price.  This payed me a few cents per share that I owned.

Can you please tell me how to enter this into Turbotax Premier?

Thanks,  Phil

[DavidD66]

You report in same way you would report the sale of stock.  Even though its not reported on a Form 1099-B:

• Type "1099B" in to Search  and hit enter 
• Click on "Jump to 1099b" 
• Answer  Yes  to "Did you have investment income in 2023?"  
• Click through the program until you get to "Let's import your tax info?", and click on "Enter a different way". 
• Click to highlight the box with "Stocks, Bonds, Mutual Funds", then click on Continue.  
• Enter something for "Bank or Brokerage" and click on Continue.  
• Answer No to the Employee stock question.  
• Continue through screens until you come to the page with Now, enter one sale ...
• Enter the information for your Stock Rights sale.

[pbs2bz]

Update:  I think I'm making this way too complicated.

After carefully adding up all the gains in my 1009-B statement, it appears that the $169 was not included in the Total Proceeds Gains amount.  So, when I add in this separate proceed for "Undetermined Term Transactions for Non-covered Tax Lots" (phew)  it increased the Total Gain in Turbotax by that amount.  I guess that makes sense?

Thanks David,

but that's not helping me.  I've tried to enter these proceeds 6 different times with the same results.  I don't think doing it a 7th time will help.  lol

TurboTax treats this as a stock sale every time I try to enter this. 

The only way I have been able to make the TurboTax Total Gain or Loss to equal my Brokerage 1099B Statement Net Gain Total is by entering:

Box 1d - Proceeds as $169  and

Box 1e - Cost or Basis also as $169

At this point I have given up.  If anyone has any other ideas I would greatly appreciate it.

Also:  If I just delete this entry in my downloaded list of transactions from my broker the Total Gain in Turbotax matches my 1099-B.  I may just go that route!   The IRS can come get me if they don't like it, I guess.

[pbs2bz]

David,

re: "Even though its not reported on a Form 1099-B"  - Sort of...

Update:  It is included in the Total Proceeds amount in my 1099-B, but NOT added in to Net Gain total.  In other words, the $169 is not included in my Net Gains.   To me, it really shouldn't be treated as a stock sale - because it wasn't.  I think that's why Ameritrade did not include it in the Net Gain total.

It is reported, and that's the problem.  It is reported in the "UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS" (1099-B from Ameritrade)  section of my Proceeds from Broker and Barter Exchange Transactions.

thanks,

Phil

[pbs2bz]

I'll answer my own question.   Since the income of $169 came from Selling the Rights to Purchase (offer) and not from selling any shares, then I think it really should be accounted for by reducing the Basis of the stock by $169 after it is sold and  entered in the Capital Gains section.  Makes a lot more sense to me.  Anyone else?  Bueller?

good luck!

[PatriciaV]

Did you receive a prospectus or information letter regarding these stock rights? If so, there should have been a discussion of tax treatment. Typically, if the tax status is taxable, you would have received Form 1099-DIV that reported the basis for the rights. If the tax status is non-taxable, some portion of your stock basis may be allocated to the rights. Allocation of basis is to your advantage, as this can offset any proceeds from the sale of the rights. 

If you chose to allocate basis, you would report the sale proceeds from Form 1099-B in the same manner as any stock sale, using the allocated cost basis. This could result in no taxable gain or loss from the sale.

Since the brokerage didn't know how you treated the stock rights, they reported the sale as an "undetermined transaction" and could not report a basis. The taxpayer makes the decision on how to report the sale.

@pbs2bz 

[pbs2bz]

No information or discussion from broker on how to treat this situation.  I'm not going to go crazy over trying to figure out what to do with this.  I've deleted it from my Proceeds which makes the Total Gain or Loss in Turbotax the same as in my 1099-B.

thanks for your help