Can I enter a negative amount for proceeds (Box 1d) on my 1099-B?

[DaveF1006]

No, you do not record any negative numbers in your return.   The proceeds are not allowed to be negative, per the IRS.   "The IRS no longer allows for the reporting of proceeds on a 1099-B to be negative. If your broker has reported your proceeds as a negative, then you will need to contact them to issue you a corrected 1099-B or file by mail. "  Please review this IRS link for further details. 

[Edited 02-08-2021|11:34 PST]

[canuck97]

@kimchu 

I saw the 2021 instructions for 1099B as you described.   My question is shouldn't we be looking at 2020 instructions for 2020 tax year?  I don't see 2020 instructions for 1099B though

[kimchu]

Thanks Dave,

The Link you provided to IRS is not valid "page not found". Can you please resend ?

Any documentation would be greatly appreciate to forward to my broker. 

Thanks again.

Kim

[DaveF1006]

Yes indeed. Please select this  link .

[kimchu]

Thanks Dave,

I downloaded the Sch D Instruction and scanned the entire document but could not find where it references you can not have negative number for proceeds (line 1d).  

If you can kindly point out the page and paragraph where this is referenced, that would be very helpful to take back to my broker.

Thanks again.

Kim

[quantbone2020]

@kimchu 

I got the same reply from TD Ameritrade as well.

[vpeppen]

2020 Instructions for Form 1099-B

2021 Instructions for Form 1099-B

Page 8, Item Box 1d. Proceeds, Paragraph 1:

Box 1d. Proceeds. "Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses."

Seems clear to me that negative amounts in the proceeds box are allowed.

Changing the proceeds to zero and entering the loss as a positive amount in the basis box will result that the total proceeds amount in your Schedule D will be different from the total proceeds amount reported to the IRS, on the 1099-Bs. I expect this will be one of the checks by the IRS to see whether you reported your stuff correctly. It might be wise to attach an explanation then for the difference.

[vpeppen]

The 2020 H&R Block Premier tax preparation software accepts negative proceeds in box 1d.

[kimchu]

Thanks for the post. I believe you may be right in that the IRS looks to make sure the total proceeds number on the return matches the issued 1099B, otherwise, this could trigger an audit.  So changing bases to negative value and the proceeds to zero is not ideal.

Thanks for the info on the H&R software. If they accepts negative value in line 1d, its may be worth switching to that software. 

Appreciate it.

[t007wilson]

I am having the same issue.  The negative proceeds are correct but I can not submit my returns.

[ReneeM7122]

The error messaging you are seeing with regard to the wash sale entries is a result of automatic rounding of the number imported from your broker or typed in by you.  If the wash sale adjustment is $0.49 or less, then it is automatically rounded to zero.  This type of rounding is allowed by the IRS.  Unfortunately, zero is not a valid value for this field -- thus the error message.

To resolve the issue, you can edit each individual transaction and delete the amount entered in the wash sale adjustment if it is $0.49 or less.  This will clear the error message.  

To do this, you will need to revisit the input section for the Form 1099-B transactions.  Use the following steps:

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “1099-B” and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to 1099-B”
• Click on the blue “Jump to 1099-B” link
• Click Edit beside the institution name
• Click Edit beside each transaction that contains a wash sale adjustment amount of $0.49 or less
• Delete the wash sale adjustment amount and click Done

Answer from AnnetteB6

[vpeppen]

The issue is reporting negative amounts in the proceeds box, which is impossible in TurboTax without an error message. It is not about reporting wash sales.

Today, I loaded my 1099-B from Fidelity Investments into TurboTax 2020. As expected, Fidelity reported losses from option sales as negative amounts in the proceeds box, generating the error message in TurboTax. I called Fidelity and was told that they adhere to the strict rules they get every year from the IRS concerning 1099-B forms. I asked why they recommended TurboTax (with a 20 % reduction) if that software does not accept their data on a 1099-B. They said they will report it to the right department within Fidelity, which department should contact Intuit about this issue. This might happen on Tuesday, after the long weekend.

[vanguard2011]

Thanks for the info.  Hope TT get this fixed soon.

“I asked why they recommended TurboTax (with a 20 % reduction) if that software does not accept their data on a 1099-B.”     Great question!!

Btw, TaxAct accept negative proceeds number for 1099-B.

[fanfare]

@kimchu 

you wont find that in Sched d Instructions because it's not allowed there and the instructions have not changed.

cost and proceeds can never be negative, 

you can't pay out or receive negative dollars.

only column(h) can be negative.

I realize TD Ameritrade says IRS wants that but they must be relying on some other rules from IRS.

By the way, generally, 

the requirements for how your broker reports are not the same as the requirements for how an individual investor reports !

[vpeppen]

Why is the IRS not changing their text in the 1099-B instructions then, because there they say that for an options trade with a loss, you report the loss as a negative amount in Box 1d?

2020 Instructions for Form 1099-B

Page 8, Item Box 1d. Proceeds, Paragraph 1:

Box 1d. Proceeds. "Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses."

[vpeppen]

2020 Instructions for Form 1099-B

Page 8, Item Box 1d. Proceeds, Paragraph 1:

Box 1d. Proceeds. "Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses."