Can you clarify what you did? Did you move company stock in a 401(k) to non-qualified brokerage account, and pay tax only on the cost of the company stock? If so, you would not have paid tax on the Net unrealized appreciation in employer’s securities at the time of the transfer.
I had owned my employers stock in my 401k account in 2020. But then I left that job and sole that stock in 2020and moved the proceeds into an IRA account. Do I have to report those stock sales on my federal tax return even though I owned that stock in a retirement account and, after I sole the stock when I left the company, I moved the proceeds from that 401k account of my former employer to another retirement account (IRA)? If so, where do I report this on the tax return - is it reported with regular non- retirement stock sales?
thanks
NO ... sales done inside a 401K or an IRA are NOT reported on a personal income tax return.
That’s what I thought but the TurboTax deluxe for state of Illinois asks a question whether I sold my employers stock in a retirement account due to the fact that I left that job, and if so , then it ask what cost basis and sale price I reported on my federal return. But since I didn’t report that on my federal return I didn’t understand what they were asking me to do.
@brooksberish I think what you mean is you sold the company stock that was in your retirement account, then you rolled the retirement account balance to another retirement account? If so, you would just report the distribution from the retirement account, that was reported on a form 1099-R, in the federal section of your TurboTax program.
If you are seeing questions regarding the sale of stock in your state program, you should go back to the federal section and make sure you didn't enter anything in the Investment Income section of TurboTax. If so, you need to delete the entry.