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cheezy5
New Member

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

7 Replies
ReneeM7122
Level 8

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

Here's how to enter a Qualified small business stock exclusion (Section 1202):

Although the below steps involve editing an existing stock sale entry, you may do well to delete the sale and start fresh.

  1. With your return open, search for 1099-B (upper- or lower case, with or without the dash) in your program's search box.
  2. Click the Jump to 1099-B link in the search results.
  3. On the Did you sell any investments? screen, answer Yes.
  4. If you land on the Summary of All Accounts screen instead, click Edit 
  5. If you have additional info about this sale, you can enter it on your own, or we can guide you.”, Select Guide me step-by-step (See the attached screenshot below. Click to enlarge.)
  6. Click My sale involves one of these uncommon situations. (See the attached screenshot below. Click to enlarge.)
  7. On Choose the type of investment you sold, choose "Stock" (See the attached screenshot below. Click to enlarge.)
  8. Review Some Basic Info About this Sale, Click Continue
  9. Click through several screens
  10. On "Do Any Special Situations Apply to This Sale?", select "Small business stock" click Continue  (See the attached screenshot below. Click to enlarge.)
  11. On "What Kind of Small Business Stock?" select the appropriate section 1202 type, click Continue
    Continue through the interview

If you qualify, you'll see a “Net adjustments to gain.” (See the attached screenshot below. Click to enlarge.)

Specialized Small Business Investment Company (SSBIC)

If you invest the proceeds from the sale of publicly traded securities in an SSBIC, you may be able to roll over, or postpone, the gain on your securities sale, if you qualify.

Qualified small business stock

When you sell qualified small business stock for a gain, you may be able to postpone paying income tax on the sale if you used the proceeds to purchase other qualified small business stock under section 1045.

If you did not buy other qualified stock, you may qualify to treat 50%, 60%, 75% or 100% of the gain as tax-free under section 1202 if you held the stock longer than five years.

Section 1244 Stock

Losses on sales of section 1244 stock qualify for special treatment when sold. Instead of a capital loss, section 1244 losses are considered ordinary losses and can reduce your taxable income up to $50,000, or up to $100,000 if you're married filing jointly. (No more than $3,000 of net capital losses can be used to reduce other income each year.

 

This answer was provided by 

MichaelDC

cheezy5
New Member

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

These instructions are outdated, and the screenshots you're referencing don't show up.

 

When I click the 1099-B link I don't see "Summary of All Accounts", I see "Your investment sales summary."

 

When I click edit there, there is no "guide me step by step flow" or any "My sales involves one of these uncommon situations" links.

 

Can you please share some instructions for the latest version of Turbotax online?

mikeed32084
Level 1

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

PLEASE UPDATE INFO ON THIS ARTICLE!

 

Mike_G_1
Level 1

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

I'm having the same issue. I opened a case with support but they were unable to help. 

randomuser2249
Level 1

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

i too have tried this countless times - it is really frustrating - let us know if you get anywhere with your case

ReneeM7122
Level 8

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

You're correct, QSBS stock sales are excluded per section 1202.  Normally it would be reported on form 1099-B, but if you didn't receive one, here is what to do:

 

  1. On the Federal tab, search for 1099-B and hten Jump to form 1099-B.
  2. Select "this is a small business stock"
  3. When it asks you if you want to adjust the cost basis check the top box that says "Help me figure out my cost basis" 
  4. Go through steps.
  5. At the end, look for the "qualified small business 1202 exclusion" options

 

Here are screenshots:

@randomuser2249

 

 

randomuser2249
Level 1

How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

i worked with a live expert on this - I was able to resolve the problem by deleting my investment and then re-adding it, but making sure to select the option for multiple sales 3+ and to put in the single individual sale. This then allowed me to set dates and options regarding section 1202

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