Form 8949

[br1634]

I cashed in $5,000 in mutual fund shares, and incorrectly reported a cost basis of $3850 last year.  The actual cost basis is $54,000, so I'll be amending my return.  In TurboTax, the Form 8949 now shows a loss of $49,000.  Is that correct? I see where the $49,000 comes from, but I didn't actually lose $49,000.  

[MelindaS1]

$49,000 is the correct loss calculation, assuming that you yourself originally purchased the mutual fund shares for a total combined $54,000 purchase price, and you sold them last year at a large loss for only $5,000 in sale proceeds. 

Gain/Loss = Proceeds - Basis 

($49,000) = $5,000 - $49,000 

As long as you "lost" the $49,000 in total share value over the life of the investment, then what the software is calculating for you is correct.

Did you have a more specific question about your cost basis and capital gain transaction for these shares? Did you purchase these yourself, or did your receive them from someone else? 

Keep in mind that if you were not the original buyer of these shares, you may have a different cost basis than the original purchaser. This would result in a different gain or loss on your Form 8949 for the year. See this note from the IRS instructions for Form 8949: 

The basis of property acquired by gift is generally the basis of the property in the hands of the donor. The basis of inherited property is generally the fair market value at the date of death. 

Learn more about Form 8949 at this TurboTax video link.

[br1634]

Thank you for your response.  Yes, I am the original purchaser of the mutual fund shares for a total $54,000.  However, I only cashed in $5,000 worth of those funds.   So, I cashed in roughly 800 shares, but still own around 9,000.  So, unless I'm looking at this wrong, I didn't really have a $49,000 loss in share value since I only cashed in a portion of my investment.  That's why the number of the Form 8949 seem off to me.  Thank you for your assistance.