I've issued a 1099-B to another party, because that party made an investment in me some years ago, and this past year I paid them back for that investment. I paid them more than they invested (so they got a capital gain, and I have a loss to report). How do I enter this loss on my return in TurboTax?
To do what you are proposing you have to tell TurboTax you did not get a 1099-B i.e Box C or F
I don't think I would expect to get a 1099-B in this situation - I'm the one _issuing_ the 1099-B, not receiving it. (See details below - I'm issuing a 1099-B to PartyA showing that they received $2,500, on a basis of $1,000)
What I'm trying to figure out is how I enter the loss in TurboTax.
To clarify the situation:
1. A few years ago, PartyA loaned me money (let's say $1,000) to exercise some stock options I held - in return, PartyA would get a fraction of the proceeds if that stock ever sold. I exercised the options, and have held the stock until...
2. In 2024, the stock was sold - I received proceeds of (for example) $10,000, and per the terms of my agreement with PartyA, I paid them $2,500.
I got a 1099-B from the stock selling platform showing the $10,000 proceeds to me (with a tiny cost basis - let's assume it is $0). This part makes sense to me, and I've entered that 1099-B in TurboTax, resulting in me owing taxes on the $10,000.
However, I didn't actually get $10,000 profit - I had to pay PartyA $2,500, leaving me with $7,500 in taxable gains.
My question is: How do I enter things in TurboTax so that I pay tax on only the $7,500 net gain, rather than the $10,000 proceeds?
Since you did not get a 1099-B from a broker, you must use F8949 Page 2 Box F.