1099 B Proceed is negative

[stech]

I have 1099-B from robinhood. Form type is 8949. The proceed column has negative values. Is this correct?

[Mike9241]

ask Robinhood the reason. This is not the norm and I don't know if this will be red-flagged by Turbotax preventing e-filing.  This can also cause issues with the IRS because if that negative is not acceptable to Turbotax (you would then need to enter it as a positive in the cost column), the IRS record of total proceeds won't agree with your return.  

[stech]

I contacted Robinhood. Here is their response

You sold to open a lot of option contracts. When you sell to open the proceeds are negative

Buying to open is positive proceeds, but selling to open is negative proceeds

negative amount is correct. Contact your tax pro on how to enter

[stech]

Any update on what should I do? TurboTax may not have solution for this. What should I do? 

[JamesG1]

The IRS and TurboTax software will not accept a negative number in the Proceeds column of an IRS form 1099-B.

If negative numbers have been imported through your brokerage reports, you will need to edit the entries to make the correction.  

Losses from expired options are reported by entering the loss amount as a positive number in the cost basis column and no amount in the proceeds column. The end result would then be a loss. 

See also @ToddL99 here.
   
 @stech

[Klondiker]

JamesG1 might be correct for 2023 taxes, but not for 2024. For calls or puts that are written and expire worthless, they are shown as having NEGATIVE PROCEEDS and zero cost, but you should edit that to $0.01 for TT. Don't make the mistake of marking it as an option that expired because that will zero out the negative PROCEEDS. The acquisition date is the date the contracts were written and is the same as the sale date.

However, if a put or call is written and later repurchased, the date acquired is the date the contract(s) was written and the date sold is the date it was repurchased. In the this the positive cost is repurchase cost and the positive proceeds is the premium received on the earlier date when the contract was written.

TurboTax accepts all this properly, but editing anything is a real pain.

Option contracts that are bought and sold normally (i.e., BOUGHT first) are treated no different than stock -- no negative numbers, and if an option expires worthless, you should definitely identify the security as OPTIONS and check the box indicating it expired. That will eliminate any PROCEEDS field altogether but will show up as 0 on the IRS forms.

[Klondiker]

Ignore that last post, it's more complicated than I thought. If you write options and have a loss when they are repurchased, the 1099B, at least for E*Trade, shows a negative proceeds (negative of your profit) and a zero cost! Similarly, if you sell (write) options and they expire worthless, it will show of negative proceeds equal to minus what you got for them, and a zero cost. There is never a negative cost, afaikc.