I sold ESPP shares and my employer recorded income...
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Level 2

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

I purchased and sold ESPP shares acquired this year and my employer recorded income from the purchase on my W-2 based on the "discount" applied to the shares, which makes sense.

My 1099-B recorded a gain from the sale of the same shares at a rate based on the sale price vs discount price, which also makes sense.  

The stock price went down between the exercise date and the sale date, which TurboTax in past years has recorded as a loss.  This makes sense because I was already taxed (via W-2) on the higher price and sold at a lower price.  However, this year it appears that TurboTax is not recording this as a loss and instead has $0 for everything in that sale (proceeds, cost basis, adjustment, and gain/loss).

This looks like a software bug.  Even if the gain/loss was incorrect, it should still record proceeds from the sale...  Has anyone else run into this and know how to fix it?
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Expert Alumni

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

To report ESPP sales in TurboTax:

 

When you enter your 1099-B information you will be asked: 'Do these sales include any employee stock? This includes ESPP, RSU, RS, NQSO, and ISO' Say yes.

 

Then you will be asked 'What type of investment did you sell?' Select ‘Employee Stock Purchase Plan, (ESPP) '

 

Check the box that says 'The cost basis is incorrect or missing on my 1099-B'

 

Then select 'I need help figuring out my cost basis'

 

You will be prompted to enter your ESPP and Form 3922 information.

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Level 2

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

Yes I've done that. Similar to how it's been the past several years. But after that's done and TurboTax says o"we've corrected your cost basis" it shows incorrect data - all 0's to be exact. I'm wondering if it might be correct on the actual form, even though it's wrong in the UI but I can't find a good way to view the form without doing the rest of my taxes.

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Expert Alumni

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

To view the form, if you have already purchased TurboTax for 2019, you can view the PDF from the Print Center.

 

To get there in TurboTax Online, follow these steps:

  • From the left menu, select Tax Tools
  • Print Center
  • Print, Save or Preview this year's tax return

 

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Level 1

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

I am facing the same issue:

 

I am trying to report an ESPP sale. Here are the steps for the cost basis adjustment part:

 

  • select The cost basis is incorrect or missing on my 1099-B
  • select I need help figuring out my cost basis
  • select Next, we'll help you figure out your cost basis -> Continue (When I clisk on Continue the tax amount for the sale disappears and the refund value goes back to the one before the sale was created)
  • select It's for an employer that has an existing W-2 on this return
  • click on Sounds good
  • select I got a discount -> type 15%
  • select Yes, I received Form 3922 when I purchased these ESPP shares.
  • Enter 3922 info
  • Click Done.

After all these steps, the tax due for the sale is not computed and the refund amount is not changed. When I look at the sale on turbo tax it shows:
- Sales section field: <empty>
- Cost basis: 0
- Gain loss: same value as shown in proceeds

 

This looks like a bug. I've reported ESPP sales several times and never had this issue. Is there a way to report a bug to Turbo Tax developers? 

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Expert Alumni

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

If you acquired the stock and sold it at the same time, often the capital gain or loss is zero, since the income from the discount is reported on your W-2 form and you didn't hold the stock long enough to realize a gain or loss on the sale. That may be why TurboTax is not calculating any gain or loss on the transaction.

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Level 1

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

Thank you for your response. That is not my case. These are long term transactions and the prices are not the same. Also there is cost basis adjustment happening so even if the price was the same there should still be changes in the tax liability because I bought the stock at a discount.

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Expert Alumni

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

It is hard to help you without seeing your screen to see exactly what is going on.

 

I ran up some numbers as follows, and the correct cost basis and wage income was reported in TurboTax. First, I reported the form 1099-B information as listed on the form as follows:

 

 

Then I chose the "I'll enter additional info on my own" option and I saw this screen where I entered the correct cost basis:

 

 

 

 

Then, Turbotax calculated the correct gain as follows:

 

 

 

The discount should be reported on your W-2 form and will show up as wage income on your tax return.

 

So, if you had a $500 discount and made $1,000 on the sale, you would see a capital gain of $1,000 and wage income of $500 on your tax return.

 

I suggest you contact a TurboTax agent so they can do a screen share with you so you can walk through your entries with a professional real-time. You can contact TurboTax as follows:

 

 https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

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Level 2

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

Thanks for the response.  Your interface looks slightly different than mine (I am using the online version in web browser).  But I was also allowing TurboTax to attempt to calculate my cost basis.  FWIW this still appears to be broken in the online version for anyone else that stumbles across this post.   I would've liked to screen share with a TurboTax employee but that appears to require me to pay extra. 

 

I was forced to manually enter the correct cost basis because there didn't appear to be any way to get TurboTax to calculate it correctly. 

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Level 2

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

Mine is now showing exactly this same behavior.  When I originally tried this (I have the saved screenshots) all values were showing $0.  But now just the cost basis and adjustment are showing $0, just like you described.  It's definitely wrong and the only way I found to get around it was to manually calculate my cost basis and enter that, though based on your details I suspect that was easier for me than it will be for you.

 

Anyways, thanks for confirming I'm not crazy 🙂

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Level 2

I sold ESPP shares and my employer recorded income for the shares higher than my 1099-B reported gain. This should be reported as a loss in TurboTax, correct?

In my years of acquiring and selling ESPP this has never happened because inevitably you get the stock purchase notification and by the time you are able to get the sales order to go through the stock has dropped in price.  It's usually not enough to make much of a difference but should still result in a net "loss" as long as your discount was reported as income on your W-2.

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