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Level 2
posted Jan 2, 2020 1:23:28 PM

How to correctly report Qualifying ESPP sales that are not included in W-2?

In case of disqualifying trades that are reported in W-2 it was simple as adding a corrected cost basis. Qualifying trades that are not reported in W-2 seems to be different.

 

In my case the qualifying trade have incorrect cost basis too since it is missing the "bargain element". Because of that I understand that I need to add a corrected cost basis like for disqualifying trades that are reported in W-2. But now the "bargain element" is missing in line 7. How can I report this as compensation income in line 7 using TurboTax?

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1 Replies
Expert Alumni
Jan 15, 2020 3:51:36 PM

You can report the bargain element compensation from your qualifying trades that was not reported on a W-2 as follows:

 

  • Starting the "Miscellaneous Income, 1099-A, 11099-C" interview.
  • Starting the "Other income not already reported on a Form W-2 or Form 1099" interview.
  • Answering YES on the "Other Wages Received" page.
  • Entering $0 on the "Wages Earned as a Household Employee" page.
  • Entering $0 on the "Sick or Disability Pay" page.
  • Answering YES on the "Any Other Earned Income" page.
  • Choose  OTHER on the "Enter Source of Other Earned Income" page.
  • Entering a description and an amount on the "Any Other Earned Income" page.

 

Click the link for a detailed instructions on entering both Qualified and Non-Qualified Employee Stock Sales into TurboTax.