I got free stocks through Webull's promotion

[MWhitlock]

If I use the other uncommon income it states "Do Not Enter 1099-MISC income" .  Is it ok to do this here?  Also is free promotional stocks Apex 1099MISC, ok to use as description?  I have the same issue as everyone else with 1099MISC pushing to self employment income/business, no matter what way I answer questions..

2nd Question.  These stocks were sold and listed on 1099-B, however they have 0 listed as cost basis.  This leads me to believe i am being taxed twice. Once on 1099B and again with the 1099MISC.  Do I correct these on 1099B?

3rd Question.  Is this going to be an issue since I am changing the amounts in 1099B and what has been submitted to IRS by Apex is different than what I submit on my taxes?  I would prefer to pay twice than correct a 1099-B since the amounts are little to nothing....

[JohnB5677]

You can use this process to post the 1099-MISC

You are not self-employed, but TurboTax thinks you are because of the way you entered it on your return.

• Wages & Income
• Scroll to Other Common Income
• Select Income from a 1099-MISC
• Post your information from the form [Continue]
• Describe the reason for this 1099-MISC
• Post XXXX
• Does one of these uncommon situations apply?
• Select None of the above
• Did the XXXX involve work that's like your main job?
• No
• How often did you get income for XXXX?
• Check Got it in 2021
• Did the XXXX involve an intent to earn money?
• Answer No

If you do not follow this posting procedure it will result in self-employment.  You would also have to pay 15.3% in self-employment tax (Social Security & Medicare).

2nd Question.  Yes, you will correct it on the 1099-B.  On the input screen for each currency, there is a check block for My Cost Basis Is Incorrect.  Use the cost basis as posted from the 1099-MISC.

3rd Question. No, not if you do it right.  It is frequent that the cost basis has to be changed.  Simply keep a note with your taxes explaining what you did.  Keep it available if the IRS should question it.  They probably won't

[Almighty Fat boy]

Bro this is legit the best answer so far I haven't tried it yet but if I don't reply anymore assume that the issue was resolved. Thank you 10 thousand times over this was giving me a head ache

[amadorgcantu]

There is no place to type "promotional..." under "Other". There is a "Box 3 Other" but needs a numerical input in the field. im Puzzled, this leads to having another self employment form needing to be filled out then i need a buisness name.?!? idk

[amadorgcantu]

i know right the rabbit hole has you fill out a self employment form? then need a business name? im in the same boat. About to answer no and see if it goes away. worst 25 dollars ive ever made

[Almighty Fat boy]

So all u needa do u go to tools and delete the 1099 c (25 dollar free stock) then re do your 1099 c but this time put no intent to make money then it won't ask you for a business code or create a business file thing

[amadorgcantu]

Yes! That was it! I saw another comment that suggested that so i went with it. Thanks for the reply. It helped!

[judyme]

Will this work in 2023 and where we imported the 1099-B? Won't Turbo tax see the info in two places? I can't get past this in the Review page. Also do we total the amounts if we received free stocks at sign up and then again for depositing funds into the Webull account?

Thank you.

[judyme]

And I should add that I did not receive a separate 1099-Misc from Webull. They put everything on the 1099-B that I uploaded to Turbotax.

[MarilynG1]

If you got free stock and sold it, your 1099-B for the sale should list the Cost Basis for this stock as $0.  You would then be taxed at the difference between Cost Basis/Sales Proceeds as Capital Gain.

You don't need a 1099-Misc.  

@judyme 

[judyme]

Yes, that's what shows when I uploaded my Webull 1099-B Composite statement to Turbo Tax, Cost basis = 0 for these free stocks. I assumed the upload already added these totals into my total Capital Gains.

However, if I follow the instructions in this thread to also enter it as additional entry under Wages and Income, etc...as Diane3 mentioned, isn't that going to tax me for them a 2nd time?

And I can't just leave it "as is" because Turbo Tax won't let me go past the review pages with these two transactions.

This is just so confusing.

[judyme]

Not to mention, if I do those steps as add it to my Wage and Income, etc. will it take those items out of review?

[AbrahamT]

Just to clarify,  is the income from the sale of these free stock showing up on the Sch D then why would you enter it a second time through Wages and Income. It's not even the right place to enter because entering it there would tax you on ordinary income rates as opposed to capital gains tax rates which is how it should appropriately be taxed as in the first place.

[judyme]

I'm not able to preview any of the schedules. It's just giving me a one page summary. I guess this years version of the program isn't letting us see that until we pay so I don't know if it's putting it on Schedule D or not. 

(I haven't paid yet because I don't know if I need to upgrade to the Live Help but I don't really want to have to do that for just this one question. It's all I have left until I can file.)

I just know even though it shows cost basis = 0 (because they were free to me) it's still putting these in review.

Thank you for your help. I'm sorry, I'm not able to answer your question.

[MarilynG1]

It sounds like your 1099-B reported the free shares correctly.  What is the Review Error?  Does it just want you to verify that your Cost Basis is indeed $0?

@judyme