An accountant is preparing my forms 8949, 4797, and 6781, to properly handle wash sales, unreported basis etc. from 1099-Bs. Can I still file with TurboTax?

[psfblair]

Broker-issued 1099-Bs provide cost basis information, but they don’t provide everything needed for tax reporting if a taxpayer has more than one trading account or trades equities and equity options (e.g., for wash sale calculations). In addition, transactions may also need to be accounted for in various ways depending on whether the security e.g. is an equity option, a futures option, a commodity ETF, a foreign currency, a spread/straddle, etc. Finally, TurboTax is painfully slow when it comes to adding cost basis information related to unreported basis when the number of transactions is large. 

If I have an accountant prepare forms 8949, 4797, and 6781, can I use TurboTax to file on paper and attach the accountant's forms? Presumably TurboTax has to use the results from those forms - can I just not import my broker 1099-Bs and then manually enter the results from those forms into the right lines of the return in TurboTax? How would I do that?

[MichaelL1 · Accepted solution]

You will go to Investments

To enter your Investments sold

Click on Federal Taxes
Click on Wages and Income
Click on I'll choose what I work on
Scroll down to Investments
On Stocks, Bonds, Other, click the start or update button

Then when you say were the 1099B is from and then you will type it yourself, you will get a screen titled, Tell us about your ABC 1099B, then you will select 2nd one down that is I'll enter a summary for each sales category.

TurboTax will generate a transmittal that will outline the below that needs to mailed into IRS.

You do need to mail your (1) supporting statements, such as your brokerage statements (Form 1099B) and (2) Form 8453.

When you use this summary method of reporting (i.e. you just entered your totals and not each individual transaction), in some cases, the IRS still wants the supporting details sent to them.  You will send them these details via the 1099B forms (you can attach the summary 8949 also, but you don't have to and you should not re-list all the transactions on Form 8949 yourself if you are already using the summary.

Note:  In limited situations, you’re allowed to summarize investment sales without providing complete details.  If you are summarizing multiple investment sales that are either Box A sales or Box D sales, and there are no adjustments necessary (i.e. Code W for wash sales), then it is not necessary to mail in a statement with further details.  Turbotax will tell you this when your sales meet the criteria and will not prompt you to mail any statements.

So, if you are being prompted to mail further statements, Form 8453 says to attach Form 8949, Sales and Other Dispositions of Capital Assets (or a statement with the same information), if you elect not to report your transactions electronically on Form 8949.

When you use the summary method, TurboTax only produces a Form 8949 with the summary totals that you entered, not the individual transactions, so the Form 8949 that is included in your return is NOT sufficient for this purpose.  (Though, you can include it with the mailing as a reference)

You need to use Form 8453 to mail the brokerage statements that show the details of your transactions.  Statements should include the following items for each transaction (these are usually reported on your Form 1099-Bs:(  

• Description
• Date acquired, 
• Date sold, 
• Sales price, 
• Cost basis, 
• Gain or loss for each sale,
• Sale category based on how the sale was reported to you and the IRS, and
• In some cases, there will be an adjustment code and adjustment amount. 

NOTE: As discussed above, any sales summaries that include only Box A or Box D sales, and which have no adjustments to gain/loss, do not need to be included on a statement mailed to the IRS. 

If you are e-filing your tax return, then mail your statements along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

[psfblair]

I fear you either haven't understood my question or I haven't understood your answer. I am dealing with over 1000 separate transactions here. I will receive an 8949, 6781, and 4797 already prepared from the accountant. Copying them in line by line will take forever.

What I would like to do is not to prepare those forms with TurboTax but to enter the data that TurboTax needs from those forms directly into the appropriate places in the return where TurboTax relies on the results of 8949, 6781, and 4797. Then I would file on paper, attaching the accountant's forms to the return.

Is it possible to do that?

[MichaelL1]

Sorry, yes you can do that,  let me edit the answer above

[psfblair]

Thanks, this is very helpful. There is one thing I still don't quite understand, however. You mention the summary 8949. How does this relate to the 8949 prepared by the accountant? The 1099-Bs will contain many transactions where the cost basis was not reported to the IRS, so by themselves they are not sufficient documentation. Would I mail the accountant's 8949 along with the 8453 and the 1099-Bs?

In addition, what about the 6781  form I'd get from the accountant?

[MichaelL1]

 mail the accountant's 8949 along with the 8453 and the 1099-Bs?

with the Form 6781 you will need to go to Forms mode and then open a form 6781 and enter this.  

the Form 4797 should all fill in based on the summary 8949 and form 6781 you will be completing in TurboTax.

[psfblair]

Thanks!

[MichaelL1]

My pleasure

[fanfare]

if your accountant is giving you forms you can attach them to your form 1040 and file on paper.

If your accountant is giving you transaction details for everything you did on forms 8949, there's nothing else you need to do. Don't use the TurboTax summary option or you'll be making the mail-in election and conflicting with the supplied forms .

If your accountant is giving you Form 6781, use it, there's nothing else for you to do.

If your accountant is giving you Forms with "M" in col (f) or
"see stmt" that's a different story; reply back.

if your accountant is not giving you Schedule D, maybe you should ask him/her for that ! It has to comply with the other forms you are attaching.

OR

you can get Schedule D in PDF-fillable form at www.irs.gov and fill it out yourself based on the other forms.

Enter the subtotals for each sales category on the Schedule D line for that. 

each sales category will be on it's own set of 8949 pages.

Once you start doing what you have in mind, you'll either see what needs to be done, or, have a big mess on your hands.