How to handle stock sales?

You can either IMPORT the broker information when it is available in late February  OR  use the summary method in the program.

You can quickly enter this manually.  Your brokerage statements should include a summary of your transactions, grouped by sales category.

There are seven possible "Box" designations that indicate the holding period (Long/Short Term) and the reporting status.  These are the only ones you have to summarize. If you want to manually enter your 1099-B as the summaries.

1. Tell us about your 1099-B sales for this BOA account
1. Answer the questions
2. Since you have more than a few BOA sales, we recommend entering sales section totals
1. Continue
3. Before entering sales section totals, take a moment to find them on your 1099-B
1. Continue
4. Now, we'll enter one sales section total on your BOA 1099-B
1. Use the drop down menu to select the correct designation.

Code A. This code indicates a short-term transaction for which the cost or other basis is being reported to the IRS. Use this code to report a transaction that the recipient will report on Schedule D (Form 1040), line 1a, or on Form 8949 with box A checked with totals being carried to Schedule D (Form 1040), line 1b.

Code B. This code indicates a short-term transaction for which the cost or other basis is not being reported to the IRS. Use this code to report a transaction that the recipient will report on Form 8949 with box B checked with totals being carried to Schedule D (Form 1040), line 2.

Box C. Report on a Part I with box C checked all short-term transactions for which you can't check box A or B because you didn't receive a Form 1099-B (or substitute statement).

Code D. This code indicates a long-term transaction for which the cost or other basis is being reported to the IRS. Use this code to report a transaction that the recipient will report on Schedule D (Form 1040), line 8a, or on Form 8949 with box D checked with totals being carried to Schedule D (Form 1040), line 8b.

Code E. This code indicates a long-term transaction for which the cost or other basis is not being reported to the IRS. Use this code to report a transaction that the recipient will report on Form 8949 with box E checked, with totals being carried to Schedule D (Form 1040), line 9.

Box F.  Report on a Part II with box F checked all long-term transactions for which you can't check box D or E because you didn't receive a Form 1099-B (or substitute statement).

Code X. Use this code to report a transaction if you cannot determine whether the recipient should check box B or box E on Form 8949 because the holding period is unknown.

Open or continue your return (if it's not already open) and search inside TurboTax for the phrase stock sales.

1. Select the Jump to link in the search results.
2. Answer Yes to both Did you sell stocks, mutual funds, bonds, or other investments? and Did or will you receive a 1099-B form or brokerage statement for these sales?
• If you land on Here are all your 1099-B sales, select Add sales from a different brokerage. Then answer Yes to Did or will you receive a 1099-B form or brokerage statement for these sales?
3. When asked how you want to enter your 1099-B, select I'll type it in myself.
4. Select or enter your brokerage on the next screen and continue.
5. On the following screen (Tell us about...), answer the questions until you reach the next screen. Select the second option, Let's enter a summary instead, and select Continue.
6. You'll now be able to enter the total proceeds (sales) and cost basis, along with the sales category. Refer to your 1099-B for the amounts and category. When finished, select Continue.

When you are done, you'll eventually come to the Here's a summary of your broker sales screen where you can edit, delete, or enter more sales.

You will have to mail a copy of your 1099-B to the IRS.  TurboTax will produce a Form 8453. You print the Form 8453 and attach the brokerage statement(s) to it. 

Thanks Critter-3.  In a summary, you are saying that yes I can group by category for the same stock and do not have to enter all sales one by one.  Is my understanding correct?

Better still just enter it grouped by sales category... this way you will only have a max of 6 entries to be made.

Hi, Critter3:

Thanks so much.  Is there anywhere in the turbo tax return that each and every stock sale has to be listed in addition to these categorical aggregate reporting? Thanks.

Nope ... you can enter them all individually  or  group them by stock per section  or  use the summary option ... all are good with the IRS.

Thank you Critter-3! Happy new year.

@Tax2019Pay 

IRS requires details to be listed on a Form 8949,
or on your other forms (e.g. consolidated 1099-B) which have the same information and in the same manner as Form 8949.
Either way, if you choose to summarize, you have to mail the transaction details to the IRS within three business days of IRS accepting your e-Filed tax return.(unless you have attached a PDF of the transactions details to your e-Filed return. TurboTax seems to be adding this feature now).
Only Exception: if you summarize Category A or Category D, Form 8949 is not needed for transactions without adjustments. No mailing is necessary.
If you don't have a 1099-B from coin base (crypto) your sales category is C or F.

There is no exception for these categories.

I assume that IRS will receive 1099-B but not Form 8949.  In my case, all sales were category A or category D and without the need for any adjustments. I assume that in this case, both you (fanfare) and Critter-3 are aligned that I can just group the transactions by categories without having to entire the details one sale at a time, correct? Thanks

If you had no wash sales, and only Box A and/or D activity, no form 8949 is required.

there is no reason to import or key in those transactions (unless you like to look at them on your tax return paperwork).

See Schedule D to see how the proceeds subtotals by box checked are reported.

When other boxes are involved, you can avoid entering details by selecting the "mail in option".

I hope this is all clear by now !

Dear Fanfare or Critter-3:

Just to double confirm.  I just received my 1099B from a brokerage firm, which included only stock transactions with Category A (short term covered basis reported to IRS) and Category D (long term covered basis reported to IRS).   There was not a single transaction that requires an adjustment.  There were 2 dozen stock buys/sales fell into these two categories.  Turbo Tax allowed me to choose either (1) enter all sales - one sale at a time or (2) summarize these sales by two categories - 2 entries: one with Category A and one with Category D without having to list each stock sale one by one.  If I choose (2), can you let me know if I still need to mail in the transaction details within 3 days of the eFiling?  

Thanks so much. 

No.  If you're e-filing, you only need to mail copies of your 8949 along with Form 8453 if:

• You entered a summary for one or more sales categories (instead of each individual sale); AND
• The sales category for one or more summaries is something other than Box A (short-term covered) or Box D (long-term covered); or
• The Box A and/or Box D summary includes adjustments (typically listed in boxes 1f or 1g on your broker statement).

Otherwise, if you entered each individual sale, or you entered summaries for Boxes A and/or D with no adjustments, don't mail in your 8949.

Do I need to fill out or mail in Form 8949?

@Tax2019Pay 

Another question: I received W2 and also 1099B for the same company stock option exercise/sell - identical information on both W2 and 1099B.  How do I handle the 1099B entry into Turbo Tax so that I do not get taxed twice on the same income?  Also do I need to send in Form 8949 for the stock option exercise information (by the way the Form 8949 and Form 1099B were combined - the top part of the statement is 1099B and the bottom part of the statement is Form 8949. Thanks.

To add to my question:

The stock option gain was reported on W2.

I also received 1099B, if I entered the total proceed and total cost, this income will be double taxed.

So how do I adjust the total cost in Turbo Tax?

Do I need the W2 amount to the Total Cost Base or do I click "I need to enter amounts from box 1f, box 1g, or other adjustments, and enter total adjustments to gain or (loss) with - W2 amount?

The amount included in your box 1 wages is the start of your basis. Add to that any expenses to purchase or sell. You will want to adjust the basis for the 1099-B in the program. The program will print out what you need to mail in. @DawnC has the answer above for when you need to mail it in.  As long as you meet the qualifications she listed, you do not need to mail it in.

Can I ask a follow up questions to the experts on this board? Thank you in advance for your time.

I received a W2 with $10k as a result of exercise of company stock option, and it was labeled as "V".

I also received a 1099B for the same stock option exercise, showing net proceed of $15000, and cost of $5002 (including a few cents a share of processing fees totaling $2), and it was categorized as "A - short term cost base reported to IRS" without the need for adjustment.

My understanding is that I should include the $10k from W2 as income; and then adjust 1099B base by adding the $10k to the $5002 cost so that I have a negative $2 as loss.

Question 1: Is this correct way of reporting in Turbo Tax?  

Question 2: Will IRS understand why I added the W2 amount to the base of 1099B?  Or do I have to explain it somewhere?

Yes, you are correct in adding the income reported on your W-2 form to the cost basis reported on your form 1099-B. You should report the form 1099-B amounts as listed on your 1099-B form, then you will see an option in TurboTax to adjust the cost basis your entered. The IRS will understand why you adjusted the cost basis, as the reporting on your W-2 form will indicate that your 1099-B is likely to be adjusted. You don't need to explain it anywhere.

Hi ThomasM125: Thank you.  Sorry to seek additional clarification.

You said that I should report 1099B as listed, and then adjust the cost base.

Where exactly in Turbox Tax do I make the adjustment of the cost base?  Do I enter a negative number of W2 box 1 for the stock option excise gain?

No, don't make any adjustments to your W-2 form. Enter it exactly as it is on your copy. Next, enter the 1099-B form:

1. Select Federal from the left side menu.
2. Select Wages and Income toward the top left.
3. Scroll down/ expand the list and look for Investment Income.
4. Find Stocks, Mutual Funds, Bonds, Other and click on Start or Update to the right. 
5. On the screen titled,  Did you get a 1099-B or brokerage statement for these sales? answer Yes.
6. On the screen titled, Tell us about this sale, answer I'll enter one sale at a time. 
7. Fill in your information from the 1099-B.
8. When you get to the question, Was this a sale of employee stock?, answer Yes.

As you continue to answer questions, you will get an opportunity to tie the stock sale to your employer and it will also help you figure out the correct basis of your stock.

Thanks.  I entered exactly what was on W-2 and 1099B for the exercise of the nonqualified stock option.  However, I did not get a question "was this sale of employee stock?"  Would it not be correct if I just add the W-2 amount to the cost base? If not, can someone point me to the right way to enter the correct cost base?

FYI, In W-2, it showed the income as "V" in Box 12a.

If I adjust the cost base, what letter code do I need to enter for the adjustment?

If I have exercised the same stock option grant 5 times (sold 100 shares each 5 times), do I need to enter 5 times?  Or can I choose "I will enter a summary of each sales category"?

You can do either.  You may also have the option to import the 1099-B directly from the broker into TurboTax and solve the problem that way.  

Thanks Robert.

I have received a W2 (box 12a has "V" - non-statutory stock option exercise) and 1099B for the same exercise/immediate sales.  This was for the same stock option grant.  I exercised on 5 different days throughout the year.  The short-term base was reported to the IRS.  

What is the most acceptable way to handle nonqualified stock option exercise?

Must I report one sale at a time - 5 times, and go through worksheet by answering each time that it was employer stock option exercise?  Or can I just report the total proceed and total cost base, and add the W-2 amount to the cost base - by doing so, the Turbotax will not take you through the worksheet for employer stock option exercise?

I am so confused as to what will be the most acceptable for the IRS.