I import 1099-B from TDAmeritrade into Turbotax. The transactions for GBTC are some proceeds for investment expense (Principle payment). But Turbotax take it as gain instead of investment expense since the sale quantity is 0, data acquired is n/a, and cost basis is "...".
What should I do to make Turbotax treat theses proceeds values as investment cost not sales' gain?
Thank you
It appears you are correct. The GBTC holds no assets other than BTC tokens. Accordingly, when expenses are incurred, Trust assets (i.e., BTC tokens) are sold to cover the expenses.
Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and directly incurred their pro rata share of the Trust’s expenses.
In order to calculate your 2021 taxable gain or loss from the sale of BTC to cover Trust expenses, you need to obtain the 2021 Grantor Trust Tax Information document. That document will provide examples and a step-by- step process on how to determine your cost basis and any taxable gain or loss based on the data you have in your 1099-B. Unfortunately, while we could access the 2020 Grantor Tax Information document, we could not locate the 2021 version of such document because access was denied. However, you as a Shareholder in the Trust may have access to such document.
When you are able to apply the step-by-step process as explained in the 2021 Grantor Tax Information document, you will then have the information you need to enter into TurboTax. In other words, it appears that your 1099-B just reflects gross proceeds from the sale of BTC; however, you don't know what cost basis you had in the BTC that was sold to cover Trust expenses. That is why you need to first obtain the 2021 Grantor Tax Information document.
I don't know how this can be reported as an expense. The 1099B is showing it as a SALE. ??
You do need to report it as a sale. If your question relates to the sale of GBTC assets to cover trust expenses, then yes, those get reported as sales. Shareholders in GBTC are treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and also directly incurred their pro rata share of the Trust’s expenses. Thus, when the Trust sells Bitcoin, each shareholder must determine whether the sale of their pro rata share resulted in a gain or loss.
The 2022 Grantor Trust Tax Information for GBTC contains all of the information a shareholder needs to compute their respective gain or loss. TurboTax does not make these calculations. If you need to access the Trust Tax Information, here is a link to such document. At page 15 is an example of how a shareholder can calculate their gain or loss.
2022 Grantor Trust Tax Information