1099-b with 8949(X)

[heywall]

The company I have buying stock from over the past 7 years. I work for this corporation and buy shares though the employee stock program from my paycheck each month. SO, i have made purchases over the last 7 years, once a month. The company had a SALE OF RIGHTS ENTITLEMENT and gave 3$ per share to each holder. I have about 400 shares. 

I received a 1099-b with an X under Applicable check box on Form 8949. The 1099-B lists, 1a amount of shares, 1c date sold, 1d proceeds, 4 federal income tax withheld (0$) and 5 check if noncovered security marked (X), state tax withheld 0$. 

What is missing is my date acquired (various over the last 7 years, every month), box 1e cost or other basis and box 2 type of gain or loss. thus, giving me an error on this document in turbo tax.

How do I fill out my 1099-b and do I fill out an 8949 as well? 

Please help

[JamesG1]

Are you saying that the cost basis for the 400 shares reported on the IRS form 1099-B was solely the shares purchased through your payroll?  Or was there an additional payment?  Please clarify.

If the cost basis for the 400 shares was only the payments made through your payroll, you may be able to determine the amount that you paid by viewing the final paystub at the end of each year.

The dates purchased were 'Various' and you may be reporting a short-term portion and a long-term portion.

• Short-term gains or losses come from the sale of investments owned one year or less.
• Long-term gains or losses come from the sale of investments held more than one year.

To enter the form manually In TurboTax Premium Online, follow these steps:

1. Down the left side of the screen, click Federal.
2. Down the left side of the screen, click Wages & Income.
3. Click the down arrow to the right of Investments and Savings.
4. Click to the right of Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B).
5. Click Add investments.
6. On the Let's import your tax info screen, select Enter a different way.
7. On the OK, let's start with one investment type screen, select Stocks, Bonds, Mutual Funds, then Continue.
8. At the screen Which bank or brokerage, enter the information.  Click Continue.

[heywall]

I buy the stocks through my employer, they use a different site i can see all my purchases, with dates and prices. 

The issue is, I did not sell stock. So I still hold all of my shares. There was a sale of rights (company trying to fundraise more money) but this company is based out of the UK so I was not legally able to buy more shares as part of the rights. 

I was paid out 3.50$ per stock I held. 400x 3.50$ is what was paid out and listed on my 1099-b. But I did not buy or sell any stocks to earn this payout. I still have all my stocks and this cash entitlement from the broker. They will not help with any information, I called and asked. they simply say this was a cash entitlement and was not due to buying or selling any shares. 

Turbo tax wants me to enter in all my purchase dates and sale price for my entire 400 shares, like i would have to do when i sell my shares. but that is not the case. these shares are worth 50-60$. If i do this, my sold price looks like 3.50$ per share, which would end up looking like a huge loss of my investment. 

[JamesG1]

You would not report the sale of the entire 400 shares.  The IRS form 1099-B sells the stock rights and not the shares themselves since you still have the shares.

I assume that the stock rights have an issue date and the sale of the rights was short term and not long term.

You were given the rights?

Your cost basis in the rights would be $0 or some allocation of your cost basis for the 400 actual stock shares over

• the cost basis of the 400 actual stocks, as well as 
• the 400 rights. 

What does the IRS form 1099-B with an X report?  

I understand that it reports:

• 1a 400 stock rights,
• 1c date sold,
• 1d proceeds of 400 @ $3,50 / share,
• 4 $0 Federal income tax withheld,
• 5 Noncovered security marked,
• $0 state tax withheld.

 The IRS form 1099-B would report the sale of the stock rights, likely short-term with basis not reported to the IRS.

[heywall]

you are correct for the information given on my 1099-b plus Applicable check box on Form 8949 has a X under it. 

I would agree it was short term, because they basically issued and sold the rights at same time. 

Will turbo tax allow no cost basis, or some number has to be in there?

Are you saying take my total money invested divided by total money invested + the proceeds from the rights? 

I think the only thing i am missing to complete the form in turbo tax is the cost basis. that's what I must figure out. Is it 0 because i didnt "buy" anything for the sale of rights? 

[JamesG1]

Your cost basis in the rights would be $0 or some allocation of your cost basis for the 400 actual stock shares over

• the cost basis of the 400 actual stocks, as well as 
• the 400 rights. 

As an example, if you paid $4,000 for the 400 shares of stock your cost basis will be $4,000 or $10 / share.

If shareholder services valued the rights at $3.50 / unit at the time that they were issued, your investment now becomes:

400 stocks x $10    =  $4,000        74%    

400 rights x $3.50  =  $1.400        26%

                                      $5,400        100%

After allocation the cost basis remains $4,000 but allocated over the two assets.

400 stocks        $2,960    =    74%  X  $,4000

400 rights         $1.040    =    26%  X  $4,000

                           $4,000         100%

If you choose to allocate, retain a record of your computations in case a tax authority has a question at a later time.

If you report a $0 cost basis, you enter '0' in the cost basis.