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

[jman10001]

If you change your negative proceeds into a plus, wouldn’t that reflect that you are having a gain amount rather than a negative amount?

[nirlay]

what you have now:

proceeds : -x ; cost basis: 0 ; gain/loss: -x

what you should do manually is:

proceeds: 0; cost basis: +x; gain/loss: -x

[fanfare]

The thing is, other tax prep software will allow a negative amount for proceeds, as shown on your 1099-B.

This is accepted by the IRS, so it's not clear why TurboTax has decided to flag it.

[fanfare]

[FOLLOWUP]

I found a very  interesting "2020 Known Issues" item on the IRS website.

IRS says:

Schedule D Column (d) all lines should accept a negative dollar amount. 
BUT there is an issue, namely, e-File does not allow it.
IRS says:
"The tax software should e-File a positive amount but do the arithmetic with the true negative amount.

Problem will be corrected 2021."

That's exactly what I see on my 2021 tax transcript after e-Filing, which at first sight, was confusing.

So either this is still not fixed, or my tax software still has the workaround.
Note: I did not file with TurboTax.

Evidently, TurboTax has not adopted this recommendation but wants you to get rid of the negative proceeds.

Oh well, on to tax year 2022.

[nirlay]

Is the negative cost basis issue fixed for 2022? I do not see this fixed.

[GeorgeM777]

No, you won't be able to enter a negative cost basis into TurboTax.  If the transactions at issue here relate to short puts or covered calls that were closed at a loss, the way to report transactions of this type is to enter your buy to close cost as the purchase price--even though it came later in time than the sell to open transaction.  The proceeds you received when effecting the sell to open transaction should be entered as your proceeds.  You will also have to reverse the sell to open date and the buy to close date so that the dates appear in chronological order.  If the purchase date and the sale date are not in chronological order, you will likely see an error message indicating that the sale date cannot precede the purchase date.

@nirlay 

[nirlay]

@GeorgeM777 My negative cost basis is because I rolled options. Hence what I did in the past is reversed the cost basis and sale price, so that it still shows a loss. That's OK, right?

[GeorgeM777]

Yes,  assuming you are reversing the order in which the transactions occurred.  In other words, the buy to close is entered first as if it was the opening transaction (even though it was the closing transaction and thus occurred later in time than the sell to open).  And the sell to open is entered as the second transaction (even though it happened first because it was the opening transaction).  

@nirlay 

[nirlay]

well....  when you roll an option buy and sell happens at the same time ( and date), so does it matter what you said @GeorgeM777

[fanfare]

roll :  "buy and sell happens at the same time ( and date),"

Only the buy leg is reported on that date.

IRS says: the Date Acquired is the date you closed the short sale, not the date you opened the short sale.

And, Date Sold is the same date if you had a profit, otherwise the next business day.

options settle in one day.

@nirlay 

[mtay]

turbo is asking that I check the entry of a negative amount for foreign tax paid (Box 7) on my Schedule B. How do I fix that, since that's correct on my tax reported. 

[DaveF1006]

 Remove the negative number as it has no impact on your return anyway.