I am running into all sorts of issues as I sold worthless ESPP shares (company out of business). I have a 1099-B and form 3922 that has all of the information necessary. When I enter it into TurboTax, the system is not behaving as I expected. If I enter the items from the 3922 form TurboTax is not adjusting the basis based on the 15% discount. If I enter the adjusted basis myself and add the discount from the purchase as compensation I can’t find that income showing up anywhere in the system.
No income is included in a w-2, so that amount needs to get included somewhere. The below is an example without real numbers.
Fair market value at grant = $1,000
Purchase Price = $850 (after 15% discount)
Proceed from sale $0.10
The math should have $150 as compensation income (once again not reported on w-2 company no longer exists) and long term capital losses of $999.90. Depending on if I let TurboTax calculate the adjusted basis it just doesn’t adjust and gives the reported $849.90. I can manually override that, but nowhere does the additional compensation show up even if add it during my adjustment. What can be done?
