Why is Form 8949 showing ERROR, sales price is not between the prescribed upper and lower limits when the numbers match the 1099-B?

[jcberardo]

In the Sales Price (Proceeds) box:
1099-B box 1d has -1,301.58.
The Turbo Form 8949 has -1,301.58.
Why is the Turbo Form 8949 saying there is an error?
form 8949 ERROR sales price is not between the prescribed upper and lower limits

[ThomasM125]

The problem is that the sales price is below $0. How do you sell something for a negative amount? What is your basis reported in 1(e)? 

[jcberardo]

Hello ThomasM125,

Well Mate, you can have a negative number in Form 8949 and in Form 1099-B worksheets!

Turbotax updated this morning 18-Feb-2021 and when I ran the update on the same file as is, no changes, it accepted all the negative numbers from the financial services 1099-B documents that were downloaded into Turbotax....  Those negative numbers resulted from CALL trades. The ERRORs were flagged in the 1099-B Worksheets, only. 

Regards

JCB  😎

[gloriah5200]

There has been a change by the IRS starting with the 2020 tax returns that will reject any return filed with a negative number reported in the proceeds or cost basis fields for Schedule D. 

TurboTax is flagging these situations ahead of time before the return is filed in order to prevent the IRS rejection. 

Some brokers are still using the old convention for reporting negative values and have not updated their reports to match the IRS.  

The error message reported by TurboTax is telling you that the number entered cannot be negative.

Gains from expired options are reported by entering the gain amount in the proceeds column and no amount in the cost basis column.  The end result here would be positive. 

Losses from expired options are reported by entering the loss amount in the cost basis column and no amount in the proceeds column. The end result here would be negative. 

No negative numbers should be entered in either the cost basis or proceeds fields.  

If negative numbers have been imported through your brokerage statement, you will need to edit the entries to make the correction.  

For additional information refer to the following link:

Sales Price not between upper & lower limits

[ChrisM7]

I'm having this same problem with Form 6781, part II, column D won't allow negative numbers to be entered. This needs to be corrected.

[jcberardo]

Suggest contacting your financial institution and get a reply.

This is Fidelity reply (I underlined the key point):

Dear JB:

Thank you for contacting Fidelity Investments regarding your account ending in 0000. It is my pleasure to assist you.

New IRS e-filing standards restrict taxpayers with negative proceeds from filing electronically. As of a result of these changes, you may experience issues filing your tax returns through electronic tax prep services (e.g. TurboTax, H&R Block, Tax Act). Due to the influx of feedback from taxpayers regarding this new change, the IRS will be updating the e-filing standards to accept negative amounts. At this time, the update is tentatively scheduled to occur the end of March.

Please contact your tax advisor or tax prep services company for additional guidance and troubleshooting.

I hope you find this information helpful. If you have any questions regarding this issue, or for any general inquiries regarding your account, please contact a Fidelity representative at [phone number removed] for assistance.

Turbotax provides a work-a-round that makes you manipulate the Turbotax form which will not match the financial statements that are sent directly to the IRS... And Turbotax has not stated they will defend this if you are audited by the IRS.. 

---------------------------- end.

[ChrisM7]

I am with Fidelity as well so that was very helpful.  Thank you!