Question 2: ESPP shares – cost basis after transfer from computershare

[rkw750]

 

Title: ESPP shares transferred from Computershare – cost basis handling in TurboTax Desktop

I am using TurboTax Premier 2025 Desktop (installed client software).

I transferred qualified ESPP shares from Computershare to my brokerage account. After the transfer:

• Only the purchase price (what I paid) transferred as the cost basis
• The ESPP discount portion does not appear included in the brokerage‑reported basis

Questions:

1. When I sell these ESPP shares at a gain, do I need to manually adjust the cost basis in TurboTax Desktop to reflect the correct ESPP tax treatment?
2. How should TurboTax Desktop properly split the ordinary income portion vs. capital gains when the brokerage reports an incomplete cost basis for qualified ESPP shares?

[MarilynG1]

Yes, when entering your 1099-B, check the box to indicate 'my cost basis is missing or incorrect'.  On the next screen, enter the correct cost basis.  Your W-2 for the year you purchased the shares would have your discount amount included in Box 1 Wages.  There should be a notation in Box 14 with an amount for the discount. 

Divide that amount by the number of shares you exercised and add that amount to the number of shares you sold Cost Basis.  For example, if you exercised 100 shares and your discount on your W-2 was $1000, add $10 to the Cost Basis amount reported on 1099-B for number of shares sold.

You may also have a Form 3922, showing in Box 4 the FMV of the shares on exercise date, and in Box 5 the Exercise Price paid per share.  The difference is the discount amount you received. 

Here's more detailed info on Employee Stock Purchase Plans. 

@rkw750