Hello all,
In my original 2023 return, I forgot to 'adjust' my cost basis for my ESPP sales which resulted in over $2,000 over double-taxation since the 15% discount was included as icome for most of the ESPP shares I sold.
Anyway:
1) When I started working on amending my 2023 return on the TT Premier Desktop, I also made some corrections in form 8949 in the 'Description' for some of the other non-work stocks I sold. They were initially imported with long characters from the 1099-B.
For example, originally, I had one of the imported entries as:
5 shares of VANGUARD INTL EQUITY IND FD FTSE
I replaced it with:
5 shares of VEU VANGUARD ETF
No other changes in prices, dates or anything, just to simplify the description. Do I need to mention this in the 'explanation of changes' field on why I am amending? Do I just leave that part out?
2) Speaking of 'Explanation of changes' section, since the only major change is correcting the ESPP cost basis which also updates Sch D and forms 8949s, do I just say something like "Amending mt return to update the ESPP cost basis"?
Appreciate you all in advance!
It depends. The IRS may not immediately see the carryover from 2023 is not the same on the 2024 tax return. Eventually the numbers will be evident. If you choose not to amend, then you should not change the figure from your 2023 return. This would mean you will lose the $2,000 that was accidentally omitted.
If you want to use that figure in your 2024 tax return, then there's no question, the 2023 return needs to be amended.
In reference to the other question, the answer is yes. I agree with fanfare. You can mail only the 1040-X, Schedule D and Form 8949. I would be inclined to include your capital loss carryover worksheet only because it's an amendment. Worksheets are not actually required to be filed, so your explanation will suffice if you choose to leave the worksheet out.
Your explanation is correct. Use the 3922 form from your employer to get the correct basis.
Is changing the descriptions to shorter and more readable stock names an issue? In other words, will IRS give me trouble for modifying descriptions on amended 8949s?
Yes enter the explanation of 'Amending mt return to update the ESPP cost basis.' on your amended 2023 tax return.
No. changing your descriptions is not a concern when amending your return. The explanation will be sufficient to explain your changes.
It's important to amend your return and then enter the correct capital loss carryover because TurboTax will not have the correct carryforward amount. Use the link below to enter the correct carryforward amount on your 2024 return even though the amended will not be processed immediately.
Thank you @DianeW777 for the explanation! - I just want to understand one final piece. Am I required to amend or is this a personal preference on my side?
Sorry I was also referring to this other post I made: https://ttlc.intuit.com/community/after-you-file/discussion/re-we-don-t-detect-any-differences-between-your-original-2023-return-and-your-amended-return/01/3530746#M783915
I understand that the $2k loss may come handy in the future but was hoping it would be fine without amending. Also, since I am manually editing the carryover amounts in the 2024 return, will the IRS reject my return since my net carryforward loss from 2023 isn't matching given they still 'don't know' that I am amending my 2023 return?
It depends. The IRS may not immediately see the carryover from 2023 is not the same on the 2024 tax return. Eventually the numbers will be evident. If you choose not to amend, then you should not change the figure from your 2023 return. This would mean you will lose the $2,000 that was accidentally omitted.
If you want to use that figure in your 2024 tax return, then there's no question, the 2023 return needs to be amended.
In reference to the other question, the answer is yes. I agree with fanfare. You can mail only the 1040-X, Schedule D and Form 8949. I would be inclined to include your capital loss carryover worksheet only because it's an amendment. Worksheets are not actually required to be filed, so your explanation will suffice if you choose to leave the worksheet out.
@DianeW777 - Did you mean to include my 'Carryforward' sheet with my amended paperwork? The 'Carryover' sheet is the same for the original and the amended one.
Thank you again!
Yes, however it's not required. It should be different since it would have a higher carryover for 2024 than on your original return based on the questions and comments here.
@DianeW777 Hi again Diane, sorry, one last quick question. If I choose to amend. Will the IRS reject my 2024 return since the capital loss carryforward/carryover amounts are different by over $2,000? Since I'll be mailing in my amended 2023 return paperwork, and IRS taking weeks to process it, I'll have to e-file my 2024 by the deadline and I just want to make sure IRS does not reject my return.
No, the IRS would not reject your return for that reason. The 2024 return should be filed on time and using e-file is the best option.