topic 1099-B incorrect gain calculation in Get your taxes done using TurboTax

1099-B incorrect gain calculation

Anonymous — Tue, 13 Apr 2021 02:11:42 GMT

Hello,

I've been fighting with turbo tax premier for a few hours now. While entering info from my 1099-B from an employee stock account it seems to be trying to tie my 1099-B Proceeds to my W-2 (probably correctly), but it's causing it to produce an incorrect Gain/Loss value. To troubleshoot I've done the following:

With an Imported W2 from my employer:

- Imported my 1099-B from my broker account (produced an incorrect Short Term Gain of $2620.00)

- Manually typed in all the transactions from the 1099-B (produced an incorrect Short Term Gain of $2620.00)

- Manually typed in grouped transactions (Long term and Short term) (produced correct Short Term Gain of $-40 (fees for sell to cover transactions))

In a separate return file with no W2 info:

- Typed in all of my 1099-B transactions (produced correct Short Term Gain of $-40)

I'm really struggling to figure out what's going on here. Any advice would be helpful.

Re: 1099-B incorrect gain calculation

gloriah5200 — Tue, 13 Apr 2021 02:31:08 GMT

Here are a couple of links on how to enter the ESPP purchase and sales info and the Employee Stock purchase and sales on W-2 and 1099-B.

Here is a link for help on entering Employee Stock purchase plan and sales:

ESPP purchase and sale info

Employer stock purchase and sales reported on Form W-2 and 1099-B in Turbo Tax:

Employee stock purchase and sales on W-2 and 1099-B

Re: 1099-B incorrect gain calculation

Anonymous — Thu, 15 Apr 2021 14:14:09 GMT

Hi Gloriah,

Thanks for the reply. Neither of the links seem to be the answer to my problem. Maybe I can be more specific with an example sale and what Tubo Tax is doing:

In June of last year, I had 3 stocks vest, 2 were sold to cover taxes, I received 1. Let's say the stocks value was $500 at the time of vest.

When I input this into the Turbo Tax software it goes like this:

Input the sale from the 1099-B (2 shares sold, $990 profit (2x$500 minus $10 commission on the sale, $1000 Cost Basis) net gain $-10
Turbo tax asks if the stock was received as a part of an ESP, yes, select RSU
It asks questions about the RSU vest date and how many were sold (info comes from 1099-B)
It asks if this was multiple or a single lot
Now it asks you to look at the bank transaction for some info about the vest:
1. Total shares Vested: 3
2. Shares sold (withheld) to cover taxes: 2
3. Date vested
4. Price Per Share on Vest Date: $500
5. Price Paid for shares: $0.00
6. Commission / fees: $10
Now it shows the RSU Sale Results
1. Proceeds, less expenses: $990
2. Price paid: $0
3. Compensation income: $1500 (3x$500)
4. Cost Basis: $500 <--- this is the problem. It should be $1000 as there was two stocks sold, not 1.
5. Short Term Gain: $490 ($500 - 10, the missing cost basis less commission)

So now when you look at all of your sales for the year, the short term gain is wrong because the cost basis is wrong.

Hope this helps explain the issue. It's entirely possible I'm inputting something wrong, but this appears to be a bug in how TT is computing the STG and Cost Basis for the RSU sell to cover taxes sale.

Re: 1099-B incorrect gain calculation

lvandemark — Tue, 12 Apr 2022 13:50:58 GMT

Hello,

I am experience the same issue, how did you resolve this?

Re: 1099-B incorrect gain calculation

DianeW777 — Tue, 12 Apr 2022 14:34:57 GMT

To correct the cost basis in your RSU stock sales by your employer on your behalf use the following steps.

To adjust the basis on your RSU sales in TurboTax:

In the Federal > Income & Expenses > Investment Income section of your return, click Start/Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
Answer Yes and then select stocks. Import or enter your transactions manually.
For the RSU transactions, make sure to select Yes to Do these sales include any employee stock?
Enter the transactions as they appear on the 1099-B with RSU selected as the type of investment.
If the basis reported on the 1099-B is not correct, you will be able to adjust it to match the supplemental information provided on the next screen, Enter your cost basis to ensure your best outcome. If you have the basis for the sold stocks, you can enter it under I found my cost basis. Otherwise, select I can't find it and need help and TurboTax will determine the basis using your brokerage information.

@lvandemark