form 8949 import has options classified as stocks

[leviton11]

All of my options trades that were imported from Fidelity on form 8949 are classified as Stock instead of Options.  They are all being flagged when I get the the Federal Review step.  I believe it is because options trades get reported by brokerages as having a cost basis of zero.  Do I have to go change all of these trades (hundreds of them) from Stock to Option or can I just bypass that step since the net profit is still accurate?

[Mike9241]

doesn't matter. the only important item is that proceeds,cost, wash sale - if applicable, and gain or loss are correct along with holding period

[GeorgeM777]

We need you clarify some information to better understand your tax situation.  What is in the Description of Property column (a) on Form 8949?  Does it just include the term "Stock"?  Does it include the name of the company?   

In the Description column you may not see any reference to whether your option trades where short puts or covered calls, but it would be helpful to know whether there is any reference to the transaction being an option trade, such as the letters "P" or "C" in the description.  

@leviton11 

[leviton11]

No it does not say stock in the description in column A.

The issue is all of the items flagged in the Federal Review, when you open each item, it has

Sales info (Boxes 1a - 1e)

What type of investment did you sell? Learn more

— Select —Employee stock purchase plan (ESPP)Nonqualified stock options (NQSO)Incentive stock options (ISO)Restricted stock units (RSU)Restricted stock awards (RS)Stock (non-employee)CryptocurrencyMutual fund, index fund, or ETFBondOptionsSecond homeLand (personal use)Land (other investment purpose)CollectiblePersonal itemsOther

marked as Stock when it should be marked as Options.

[GeorgeM777]

It should not matter that Stock is selected in connection with the question What type of investment did you sell?  If column (a) on Form 8949 provides a reasonably accurate description of the security and the dates, cost basis, and proceeds are accurate, then what you see in TurboTax should not matter. Because all of your trades have been flagged with possible errors, try going to the last screen in that section, and select Done or Continue.  Then select the Review option again and report back to us if you still see the same items being flagged. 

@leviton11 

[leviton11]

Everything is accurate and matches the 1099B that I received from Fidelity in terms of the acquired and sale dates and the cost basis and proceeds amounts.  But, TurboTax still flags all of these as Needs Review.  It will not let me file unless I manually go in to each entry and change it from Stock to Option.  This will be very time consuming and seems unnecessary since the proceeds amount is correct.

[a1m1s1]

I'm having the exact same issue...naked puts(short puts) trades.....and Turbo tax is asking me to enter cost basis for all these transactions.

[leviton11]

This is definitely an issue with TurboTax.  TurboTax needs to realize that most brokerage firms report the cost basis for options trades as zero and just accept it.  I think part of the problem is that TurboTax assumes all of the items on the 1099B are stock trades by default.  Regardless, having a person who trades a lot of options needing to go update each entry manually is not good. 

[leviton11]

I totally agree with you that is SHOULD NOT matter since the net profit is still being reported accurately.  The problem is that TurboTax will not accept the cost basis as zero unless I change each options trade entry manually to be designated as Options instead of Stock.  Also have to specify that the the zero basis is correct. 

[hhunter1111]

Yes I agree there is a bug, with the 8949 form.  I finally had to bail out of the error check and just call it a day.  It was trying to make me manually add information for each and every sale on the form.  It would've taken me forever, so I finally just bailed out on the error check.