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1099-B Confusion and Adjustment Codes

I have a similar qt as another user for calculating the 1099B:
When filling out the 1099-B info on TurboTax, I chose to enter in a summary since I have a lot of transactions.  However, The calcuations for my (loss) are not coming out correctly because there is no 1F box for the adjustments.  My 1099-B looks as follows:

  • [1d]    Proceeds                                        $12,313.23
  • [1e]    Cost or other Basis                       $12,695.68
  • [1f]  Accrued market discount                $29.54
  • Gain (Loss) Amount                                   $(411.99)

The only box available under adjustments for (accrued market discount) is:  box D (accrued market discount). When I put the $29.54 there, it is calculating -$352.91 for my loss.  I was on the phone with Turbo Tax help for quite a while, to no avail, the call was disconnected.  I cannot upload my file as I have the desktop version and it apparently does not allow that. I am also not comfortable with giving Turbo Tax access to the investment site to upload the data.  Any help would be appreciated.  Thank you

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3 Replies
rjs
Level 15
Level 15

1099-B Confusion and Adjustment Codes

When you are making a summary entry you have to enter accrued market discount as a negative amount. Enter -29.54. Then the loss amount will be correct.


But there is another issue. The accrued market discount has to be reported as interest income on Schedule B. When accrued market discount is included in a summary entry TurboTax does not do this automatically. Since you are using the desktop software, you can make the correction in forms mode. After you finish entering the investment sales summary, go to forms mode. In the list of forms on the left, look for a Capital Gain (Loss) Adjustments Worksheet ("Capital g/l adj" in the list) with a red exclamation point, indicating that it has an error. Open that worksheet and scroll all the way down to the bottom, to Part IV. You will see a box labeled "Accrued interest to Sch B" that is shaded pink. Enter the amount of the accrued market discount in that pink box as a positive amount. The box will then turn yellow and the red exclamation point will go away.

 

1099-B Confusion and Adjustment Codes

Thank you very much, I appreciate it.  In addition, the instructions ask me to mail the 1099B to the IRS.  This is new as far as I know, don't they already have this information provided by the financial institution?

rjs
Level 15
Level 15

1099-B Confusion and Adjustment Codes

If all of the sales are "covered" transactions (basis was reported to the IRS by the financial institution), it is not necessary to mail anything to the IRS. If any of the sales are not covered transactions, then the IRS does not have the information and you have to provide it.

 

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