Here is how to get the right treatment of imported ESPP sales. These instructions are for the desktop version (PC or Mac). It worked for me, but I can’t guarantee it will work for you. I recommend you make a backup copy of your tax file before you try this, just in case.
Make a temporary copy of your tax file (different from your backup copy). Open up the temporary copy, and pretend you did not already import your ESPP sales. Get to the point in EasyStep where you can add more sales. Skip importing, and tell TurboTax you will be adding a 1099-B. Make up a fictitious brokerage name and enter at least one of your ESPP sales. You can do all of them, but the reason for this exercise is to see how the forms would be filled out if you went through the EasyStep flow. Go ahead and finish entering the ESPP sales, including the screens where you enter the offering and purchase dates, the discount, etc.
When you are done, click the “Forms” button at the top of the window to go into Forms Mode. On the left hand side find the Form 1099-B Wks for your fictitious brokerage. Indented under that, you should see a “Capital g/l adj” and “Emp Stock Wks” for each ESPP sale you entered. These will serve as your reference for how you want those forms to look in your real tax file.
Open up your real tax file (In desktop, you can have more than one file open). If you have not already done so, in EasyStep find your imported 1099-B with ESPP sales, edit/review it, select the ESPP sales, click “Bulk Edit”, and indicate that these are ESPP sales. Leave the rest of those fields blank. Click “Save Changes”. When you are done, click Continue.
Now go into Forms Mode in your real tax file. On the left hand side find the “Form 1099-B Wks“ for your imported ESPP sales. Notice there won’t be a “Capital g/l adj”.
Click on Open Form at the top of the window.
In the search field, enter “capital gn”. You should see one form listed, “Capital gn (ls) adjustments/other info”. Double click that.
You should see a list of existing worksheets. Pick one that corresponds to an ESPP sale, and double click it.
In Part I you should see some of your imported data. Leave it for now.
In Part III, click on the first checkbox, “Form 1099-B reports an incorrect basis”.
Click the checkbox immediately below that “Check this box for employee stock”.
On the next line down, on the right, click on the QuickZoom button. This will open up the sought-after “Employee Stock Transaction Worksheet“.
In Part I, line 4, enter the number of shares sold (for this ESPP sale).
When I did it, line 3 filled in. Check line 3, and make sure line 9 is correct.
In Part III, leave 11a checked
Enter the discount in line 12.
Check the appropriate box on line 13.
Fill as many lines on the line 14 table as you need (one line per purchase lot).
The rest of the form should be filled out with the correct, calculated values.
Go back to the “Capital g/l adj” form, and verify that Part I now shows the correct cost basis.
Go to the “ESP Comp Wks” form, and make sure the correct checkboxes are checked for “Included in W-2?” and “Earned Income?”.
Compare each of your new "Capital g/l adj" and "Emp Stock Wks" forms to the corresponding forms in your temporary file to make sure they match. When you are all done, you can delete your temporary tax file.
