How to handle stock sales?

[Tax2019Pay]

Dear All:

I have a question about how to handle stock sales in the following 3 scenarios as I am trying to determine whether I can avoid entering stock sale one at a time:

(Scenario A) If I have bought the same stock a few times in both 2020 and 2021, and sold the same stock a few times in 2021 (with long term and short term gains as well as long term loss and short term loss, but without any wash sales), how do I handle the reporting?  Can I group all long term together, and separately short term items together, respectively, and enter "various" for purchase date and "various" for sale date?

(Scenario B) If I have bought the same stock a few times in both 2020 and 2021, and sold all in one lot on 12/1/2021, can I group all long term together and separately all short term together, entering "various" for purchase date?

(Scenario C) If I have bought a stock in one lot in 2021, and sold the same stock a few times in 2021, all short term, can I group everything together, and enter "various) for sale date?

Thanks in advance for your advice.

John

[Critter-3]

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. 

[Tax2019Pay]

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?

[Critter-3]

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

[Tax2019Pay]

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.

[Critter-3]

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.

[Tax2019Pay]

Thank you Critter-3! Happy new year.

[fanfare]

@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.

[Tax2019Pay]

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

[fanfare]

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.

[fanfare]

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

I hope this is all clear by now !

[Tax2019Pay]

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. 

[DawnC]

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 

[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.

[Tax2019Pay]

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?