I exercised stock options; proceeds and cost basis were reported on the 1099. The income from the exercise, and the taxes withheld, were reported on my W2. I adjusted the cost basis to include the reported income, showing a net loss of $5067, which is the difference between the reported income and the net proceeds from the exercise. (The company held back a large number of shares to cover taxes, so the income reported on the W2 includes proceeds from the sale of all the options, whereas the brokerage statement only includes the shares not held back.)
Now, TurboTax is showing a capital loss carry forward of $2067, but this doesn't seem right. I made money on the sale! Do I have to do anything, or is this legit?
How did you "adjust the cost basis"? That might be the problem.
I added the acquisition cost reported on the brokerage statyem and the income reported on the W2. This is the same method I've used in the past, as described at this link:
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-stock-options/L8zsxRi7B">https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-stock-options/L8zsxRi7B</a>
Here's the relevant section: "The cost basis is your original cost (the value of the stock, consisting of what you paid, plus the compensation element that you have to report as compensation income on your 2018 Form 1040). The cost basis is therefore, is the actual price paid per share times the number of shares...plus the...compensation reported on your 2018 Form W-2."
I used this method and my cost basis exceeded my proceeds by >5K.
>>>>>My question is, does this count as a capital loss for carryover purposes?<<<<<
I don't have a problem with this if it's legit, since I'll just claim the carryover loss next year (though I'd rather have the tax break right away); I just want to know if I'm missing something.
(I had a much more detailed description of my specific case, but the website would not allow me to post it. Too many numbers, I guess.)
I added the acquisition cost reported on the brokerage statyem and the income reported on the W2. This is the same method I've used in the past, as described at this link:
<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-stock-options/L8zsxRi7B">https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-stock-options/L8zsxRi7B</a>
Here's the relevant section: "The cost basis is your original cost (the value of the stock, consisting of what you paid, plus the compensation element that you have to report as compensation income on your 2018 Form 1040). The cost basis is therefore, is the actual price paid per share times the number of shares...plus the...compensation reported on your 2018 Form W-2."
I used this method and my cost basis exceeded my proceeds by >5K.
>>>>>My question is, does this count as a capital loss for carryover purposes?<<<<<
I don't have a problem with this if it's legit, since I'll just claim the carryover loss next year (though I'd rather have the tax break right away); I just want to know if I'm missing something.
(I had a much more detailed description of my specific case, but the website would not allow me to post it. Too many numbers, I guess.)
I also got this same problem when using turbotax. So in this situation can I move the W2 income to 1099B so that I can also report the $2067 lost as capital lost in this year tax return? And if I can, can you tell me how I can do it by steps? Thank you so much.
I wouldn't describe it as "moving the W2 income to 1099B." The adjustment to the cost basis to account for income reported on the W2 is entered on your form 8949, and summarized on your Schedule D.
On the 8949, list each transaction on a separate line, with the proceeds and cost basis in columns (d) and (e) entered directly from the 1099B. The income reported on your W2 is entered as an adjustment in column (g), and the net gain (or loss) is calculated in column (h). In my case, I had to split the reported income on my W2 between two transactions and enter them in column (g) on separate lines.
The sums form 8949 line 2 are then entered on Schedule D, line 1b.
Hope that helps.