QSBS 1202 for 2023

[wideglidejrp]

For the last several years, I have obtained the capital gains adjustments by editing the sales in the investment Income section of the Income Summary. This has worked very nicely. It seems in TT2023 there has been a drastic change where the individual sales are not listed. Instead the summary simply shows the totals for each of my Charles Schwab accounts. How can I resolve this? 

[MonikaK1]

It's possible that your finalized import file may not be ready. See here for a Q and A page from Schwab that addresses this issue, under "When will my tax data be available to import from TD Ameritrade and Schwab into my tax preparation software?"

Please also see the variety of user-posted solutions in this thread.

Several users have reported such issues with importing Schwab statements this season. Some have indicated that, while you can download your statement, the finalized import file is a different file that might not be ready until later this month.

Here is another discussion from last year about the availability of the finalized import file.

[andyburdick72]

It took me several tries, but I was finally able to figure out how to enter the QSB stock section 1202 exclusion in TurboTax (I'm using Premier 2023 on a Mac). I thought I would include the steps I took, in case it can help anyone else; as always, YMMV:

* If you've previously tried to enter the sale, I recommend deleting it and starting fresh

* Go to the Income tab, and visit the Investment Income (1099-B or broker statements) section

* Click "Add more sales"

* Select the "Stocks, Bonds, Mutual Funds" investment type and click Continue

* Click "Skip this import" on the next screen to choose your bank

* Enter the bank or brokerage, account number, and payer's EIN / TIN, and click Continue

* HERE'S THE CRITICAL STEP: on the screen that asks "Do these sales include any employee stock?", CLICK NO

* Click the button corresponding to the number of sales on your 1099-B; for me it was just 1 sale, so I clicked No (1-3)

* Click the button indicating whether the sale included any other types of investments; for me the answer was No

* Click the button indicating whether you bought every investment listed on your 1099-B; for me the answer was No

* Click Continue

* Click the button to enter your sales "One by one" and click Continue

* Click Continue again

* Enter your sale information, making sure to match what is on your 1099-B

* HERE'S ANOTHER CRITICAL STEP: the acquisition date must be more than 5 years prior to the sale date, or you will not qualify for the section 1202 exclusion

* Click Continue

* FINALLY, THE PAYOFF: on the screen that says "Let us know if any of these situations apply to this sale", click "This was a small business stock" and click Continue

* Adjust your cost basis, if needed, and click Continue

* On the screen that says "What kind of small business stock did you sell?", click "Qualified small business stock eligible for exclusion of gain (section 1202)" and click Continue

* Enter the adjustment amount, which equals the amount you are excluding from the capital gain calculation

For more information on how much gain you can exclude, see https://www.investopedia.com/terms/s/section-1202.asp

[KrisD15]

         DESKTOP-

       Federal 

Wages & Income

Investment Income

Stocks, Cryptocurrency, Mutual Funds, Bonds. Other

Start or Update or “Add more sales” 

Select  “Stocks, Bonds, Mutual Funds (1099-B)”

Skip Import, Select I'll type it in myself and enter Bank or Brokerage and CONTINUE

Select No for Employee Stock

Select No (1-3) for More than three sales

Select Yes for “Other types of investments”

Select Yes for “Did you buy every investment?” and CONTINUE

Select One-by-one for “Now, choose how to enter your sales” and CONTINUE

For the Sales section drop-down choose “Short-term or Long-term did not receive 1099-B”

For Type of investment, Select Stock (non-employee)

Enter Description, Dates, Sale Proceeds, and Basis and CONTINUE 

Select “This is a small business stock” for the “Let us know if any of these situations apply to this sale”, screen and CONTINUE

Select “I don’t want to make any changes to my cost basis right now” and CONTINUE

Select Qualified Small Business (section 1045) on the “What kind of small business stock did you sell?” Screen and CONTINUE 

Enter zero for the cost of new qualified small business stock and CONTINUE

The next screen shows this as 1202 sales since no replacement was purchased. 

 ONLINE-

 Federal 

Wages & Income

Investments and Savings

Stocks, Cryptocurrency, Mutual Funds, Bonds. Other

Start or Update or “Add investments” 

Select  “Stocks, Bonds, Mutual Funds (1099-B)”

Skip Import, Select Enter a different way 

Select Stocks, Bonds, Mutual Funds and CONTINUE

and enter Bank or Brokerage and CONTINUE

Select No for Employee Stock

Select No (1-3) for More than three sales

Select Yes for “Other types of investments”

Select Yes for “Did you buy every investment?” and CONTINUE

Select One-by-one for “Now, choose how to enter your sales” and CONTINUE

For the Sales section drop-down choose “Short-term or Long-term did not receive 1099-B”

For Type of investment, Select Stock (non-employee)

Enter Description, Dates, Sale Proceeds, and Basis and CONTINUE 

Select “This is a small business stock” for the “Let us know if any of these situations apply to this sale”, screen and CONTINUE

Select “I don’t want to make any changes to my cost basis right now” and CONTINUE

Select Qualified Small Business stock eligible for the exclusion of gain (section 1202 on the “What kind of small business stock did you sell?” Screen and CONTINUE 

Adjust the gain if needed 

@wideglidejrp 

[LAJLANE]

Hi, I appreciate the steps! Are these using the premier software? Thanks!

[DianeW777]

Yes, the steps would be the same in TurboTax Premier.  

If you are using TurboTax Online/Mobile you may want to select Tax Home (left panel and then Income and expenses. Next Add or edit Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto)

If you are using TurboTax Desktop follow the steps provided by @KrisD15 above.

@LAJLANE