1099-B Incomplete

[Mytwocents]

Last year I sold a country club equity membership at a loss which I'm convinced is a long term capital asset loss and therefore deductible against the long term capital gain from selling my house.  The 1099B sent by the country club has only the proceeds I received entered in Box 1d with Box 6 for gross proceeds reported to the IRS.  Since I will be entering the cost basis in TurboTax that is not listed on the 1099B based on my own calculations, is the Sales Category a Box E, Long term sale with cost basis NOT reported to the IRS?  Do I just enter the appropriate data even if it isn't listed on the 1099B?

[Anonymous_]

The problem here is that losses from the sale of personal-use property are not deductible.

See https://www.irs.gov/taxtopics/tc409

[Mytwocents]

First, I don't consider it personal-use property as you do.  I may lose the argument with the IRS, but I'm part owner of a business, a full business with liabilities and a 100% risk to my equity.  I've also researched other resources that state my equity is a capital asset.  If I made a profit, I have no doubt the IRS would demand every penny of tax, yet a loss can't be deducted?  

[Anonymous_]

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@Mytwocents wrote:

If I made a profit, I have no doubt the IRS would demand every penny of tax, yet a loss can't be deducted?  

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You are exactly correct; the equity is a capital asset and the IRS would tax you on any gain if you sold that asset.

With respect to losses, you cannot deduct a capital loss on the sale of property held for personal use.

[Mytwocents]

Thank you for your response and taking the time to offer it.  However, this will be a conversation with the IRS.  For anyone else who reads this, my opinion is that an equity membership in a country club is an ownership of a business ... a business that sells services, has revenues and expenses, has employees, incurs profits and losses including the potential of my loosing 100% of my investment and files tax returns as well as issues 1099B forms to selling owners.  My house and car do none of those things.

My question was about inputting  the cost basis in  TurboTax when that number is not listed on the 1099B.  Does that make my 1099B in TurboTax "noncovered"?

[Anonymous_]

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@Mytwocents wrote:

My question was about inputting  the cost basis in  TurboTax when that number is not listed on the 1099B.  Does that make my 1099B in TurboTax "noncovered"?

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Yes, it is noncovered if you received a 1099-B.

Good luck.

https://www.irs.gov/publications/p463#en_US_2020_publink10009961

[JillS56]

No, it does not make your 1099B "noncovered".  If the 1099-B does not report the basis of your investment and you have documentation that supports the basis or you know what your basis is, you can go ahead and enter the basis.  I believe there is a question that asks if the 1099-B reported the basis.   You would respond or check a box that says the basis was not reported on your 1099-B.   You may want to attach a copy of your documentation that shows your basis.  You should be able to attach a PDF of this documentation to your return before e-filing.  

If you do not have the documentation available and you do not want to delay e-filing, you can go ahead and e-file, but I would recommend getting the documentation ready in the event you get a letter from the IRS asking about backup for the basis.   I would just put the documentation with the rest of your tax documents for 2021.  

[Anonymous_]

I should have stated you should choose "not reported" if your 1099-B does not have basis information.