Should I change the cost basis to the value from "Adjusted Cost Basis" when I import 1099-B from my e-trade account?

[mitdesai21]

I imported my 1099-B from my etrade account. The form includes transactions for RSU and NQSO. The cost basis value imported to turbo tax was the one under Cost Basis column. But I have another column which is Adjusted cost basis (addition of cost basis and adjusted amount(ordinary income)) on my Stock Plan Transactions Supplemental Information.

What should be reported to IRS. Cost basis or Adjusted Cost Basis?

[TomYoung]

What's reported to the IRS in the "Cost Basis" column, (your out of pocket cost), and that's what you enter.  But then you click the blue button that refers to "additional info" and enter the correct basis - the Adjusted Cost Basis - on the page that shows up.  TurboTax shows the "as reported by broker" and "as adjusted" on Form 8949.  Very common when employee stock incentive programs are involved.

Tom Young

[mitdesai21]

Thanks! So at the end the gains/loss is eventually calculated based on the corrected value and not the actual cost basis. Right? Let me know if the following example is correct.
Lets say 1 RSU vested (after the taxes were deducted) and the stock price was $10 on vest. And I sold it at $11 on the next day. The cost basis will be 0. But the Adjusted Cost basis will be $11 indicating that I had $1 short-term gain. So when filling out the details in TT, I will have cost basis at 0 and on the next page, the adjusted cost basis will be $11.

[TomYoung]

"So at the end the gains/loss is eventually calculated based on the corrected value and not the actual cost basis. Right? "

Correctl, (more or less).

Your actual cost basis would be $10; that's set as the stock's FMV at vesting.

The "Cost Basis" reported on the 1099-B is $0: you had no "out of pocket" cost.

The Adjusted Cost basis should be $10.

You'll report a $1 ST gain per share.

[mitdesai21]

Cool! Now its clear! Thank You

[Carol C]

I do not see a blue button for more information

[bchap25]

I don't see a blue button either. Others answered to key in the adjusted cost basis. So that is what I'm doing.

[JohnB5677]

To correct the cost basis on stocks from a 1099-B

1. Start at Investment income
2. Select Stocks, Mutual Funds ....
3. Choose the Broker or Institution
4. Select the individual stock
5. The data you entered will be there
6. Toward the bottom of the screen select [I'll enter additional info on my own]
7. In the entry for Box 2 enter Corrected Cost Basis

[bchap25]

So this applies to input the "Adjusted Cost Basis?"

[KrisD15]

Yes, if the basis reported needs to be adjusted, it needs to be corrected. 

[nileshbadodekar]

Is this applicable to ESPP too?

[TomYoung]

@mitdesai21 

You don't have a correct understanding of the situation, at least not as you've expressed it in your post.

"So at the end the gains/loss is eventually calculated based on the corrected value and not the actual cost basis. Right?"

No.  At the end the gain/loss is calculated based on the corrected value which is the actual cost basis.  It's not calculated based on the erroneous cost basis (typically "$0") shown on the 1099-B.

"Lets say (an) RSU vested...and the stock price was $10 on vest.  Sold it at $11 on the next day.  The cost basis (reported by the broker) will be 0.  But the Adjusted Cost basis will be $11 indicating that I had $1 short-term gain."

No, the Adjusted cost basis will be $10, giving you a $1 short term gain.

"So when filling out the details in TT, I will have cost basis at 0 and on the next page, the adjusted cost basis will be $11. "

You'll enter the 1099-B exactly as it reads, showing a $0 basis.  Then on the next page you enter the correct "adjusted" basis to $10.

I think you actually do understand what's going on here, but just expressed it incorrectly.

Just to be clear, you'll enter the 1099-B exactly as it reads, incorrect "$0" basis and all, and then correct the cost basis on the next page.

[mhendricks]

Just to be very clear, 

If my cost basis says 0.00 but my supplimental form says 800 for my adjusted cost or Other Basis (z), then I would use 800 as my cost basis?

[MarilynG1]

@mhendricks Enter the Cost Basis shown on your 1099-B.  You will get a follow-up screen asking for Adjusted Cost Basis.

Click this link for more info to help you with Adjusted Cost Basis.