Zero cost basis transactions

[ragsns]

It seemed counter intuitive when we started correcting the zero cost basis reported transactions to the actual cost basis from Fidelity to see the taxes owed go up and up (as we started reporting each one).

Just making sure we did the right thing whereas we could have likely submitted with the zero cost basis and ended up with a refund instead 🙂

Can others weigh in if they had a similar experience or is there something we can do to owe less (that's really the main idea)?

Rags

[MarilynG1]

I don't think your tax increasing is related to changing your Cost Basis from $0 to the correct amount.  When you have a Cost Basis other than $0, your gains should go down, so if anything your tax should go down also.  For example, if your cost basis is $0 and proceeds are $10, you have a gain of $10.  If you have a cost basis of $5, and your proceeds are $10, you only have a gain of $5. 

Since you imported this info, you should delete your import and combine all these types of transactions into a one-line manual entry, and avoid all the editing.  Here's How to Enter a Summary in Lieu of Individual Transactions. Editing imported transactions can be problematic. 

If you're using TurboTax Online, clear your Cache and Cookies after deleting the import and re-entering a manual summary.

@ragsns 

[ragsns]

Hi MarilynG1:

Running outta time here :(

> When you have a Cost Basis other than $0, your gains should go down, so if anything your tax should go down also.

That's the part that I indicated was counter intuitive. What we did was go back to when all the cost basis was recorded as zero and added a cost basis for one of the line items and we immediately saw the taxes owed tick up as we expected and saw.

There is no doubt that TT is indeed ignoring the ones imported with a zero cost basis which seems odd. Wish we could submit without entering the cost basis which would significantly reduce our tax burden 🙂

> Since you imported this info, you should delete your import and combine all these types of transactions into a one-line manual entry, and avoid all the editing.

The editing (albeit painful) has been long done.

I am not sure this will reduce the tax burden anyway if we make it a one line entry since it will be a consolidation of the multiple lines anyway (if we do it right).

Thanks!

@ragsns