Unnecessary transaction reporting on Form 8949

[vpeppen]

TurboTax reports all option trades that resulted in a loss on Form 8949 although the 1099B shows no code  or adjustment. According to the IRS, these trades can be reported directly on Schedule D, Part I, line 1a and no Form 8949 is required. I noticed that the H&R Block software is doing this direct reporting on Line 1a, which resulted in 8 pages less for my tax return. Why is TurboTax not doing this?

[GeorgeM777]

It's not clear why TurboTax reports your option trades on Form 8949 while H & R Block reports the same transactions as a summary on Schedule D.   As long as the cost basis has been reported and there are no adjustments that need to be made, you can delete Form 8949 and enter your option transaction information as a summary.   

To enter your option transaction losses, after you have selected your brokerage firm from the drop down menu or entered its name manually, you will see the screen, Tell us about your [name of brokerage firm] 1099-B.  It is here where you can select the option to enter your option losses as a summary.  

[vpeppen]

I downloaded my 1099B from Vanguard and Fidelity as you said. However, there was no option to enter the losses as a summary during this process. After downloading the data, you can edit every transaction in the Box A category with basis reported to the IRS. The call trades with a loss where all there: None of these calls showed a code or an adjustment account. However, in the forms mode it showed that all these calls with a loss were reported on a Form 8949. All other trades were reported directly on Schedule D, Line 1a. In the edit mode you can for every trade indicate to have it summarized, but immediately the code M shows up, indicating that now the return has to be mailed in. All this seems to make no sense. B.t.w., I use TurboTax deLuxe.

[RobertB4444]

If you download the 1099-B from the brokerage you lose the option to enter the transactions as a summary.  You need to choose to type it in myself in order to do that.  Downloading the 1099-B forces the system to enter every transaction individually.

Even if basis has been reported to the IRS, if the transaction has any adjustments (amount changed due to disallowed wash sale loss is very common) then the transaction goes on the 8949.  Your 1099-B will indicate if there any adjustments.

If you summarize transactions the system may still tell you that you have to mail in the 8949.  Sometimes there is, unfortunately, no simple way to deal with the IRS.

@vpeppen 

[vpeppen]

I agree. If you download your 1099B, TurboTax, and also H&R Block, will summarize automatically all the transactions without a code or adjustment. However, TurboTax makes an exception for option trades that resulted in a loss: TurboTax put them on a 8949, while H&R Block summarizes them with the other transactions without a code or adjustment. To do the data entering by hand as you suggest, I would have to download the transactions into H&R Block tax software and copy the resulted Schedule D into the TurboTax's Schedule D. It is better then to just use H&R Block software right away.

[fanfare]

Turbotax accepts a summary of Box A transactions with no adjustments. it goes on Schedule D Line 1a.

TurboTax accepts a summary of Box A transactions with adjustments. it goes on Schedule D Line 1b. you would be making the mail-in election.

If you have no adjustments, no mailing is necessary.

if you have only a handful of adjusted transactions, you can enter each of them manually. No mailing is necessary

@vpeppen