Box 7 on form 1099-B

[leafboat]

Hi,

Box 7 of form 1099-B says "If checked, you cannot take a loss on your tax return based on gross proceeds from a reportable change in control or capital structure reported in box 1d". I think I get this but how do you "prevent" TurboTax from doing the math and reporting the negative number/loss? 

Thanks!

[tagteam · Accepted solution]

I believe you have encountered a scenario that is not supported by TurboTax.

When Box 7of Form 1099-B is checked, the program does not limit losses based on gross proceeds from a reportable change in control or capital structure reported in Box 6 of that form.

See https://digitalasset.intuit.com/DOCUMENT/A7LDFEv4x/040120-2019-unsupported-calcs-L1FQfTTgn.pdf

[Anonymous]

the only way that would work is if you use the "corrected basis" box to show cost = to sales proceeds. thus you would show the sales proceeds so you won't get an IRS letter for that and correcting the cost basis should not create a problem with the IRS either. however, if it does, just write back and state what the facts are. include the notice and sign and date the responce.

[leafboat]

Thanks for the response! Just to clarify, when you say include the "notice", do you mean include a copy of the 1099-B? Thanks again!

[tagteam]

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@leafboat wrote:

....when you say include the "notice", do you mean include a copy of the 1099-B?

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Notice or letter that you receive from the IRS, not a copy of the 1099-B.

See https://taxpayeradvocate.irs.gov/get-help/letter-from-the-irs

[Anonymous]

only if you get an inquiry/notice from the IRS then respond with a letter where you explain why you did what you did - sign and date, include the supporting info from the 1099-B you may want to circle to, and finally mail the letter, support and notice back to the IRS. make sure you respond before the date in the notice and use a mailing method where you get proof of delivery. keep copies.