Help with "Non Covered Security" on 1099-B

[avigo45]

I received a 1099-B for a RSU (restricted stock units) from my employer. Box 5 "Noncovered Security" is checked. When I look this up, it says that means it is not reported to the IRS. 

What does this mean in regards to if or how I file this 1099-B? I see nowhere to check this box was filing. Does this mean I should not file the 1099-B? I am getting so confused by this particular 1099-B and cannot get a straight answer. 

[DavidD66]

You definitely need to report the transactions on the 1099-B.  "Noncovered Security" means the cost basis was not reported to the IRS.  The reason the cost basis is not reported to the IRS is because it is probably wrong, if there is one on your 1099-B.  RSUs are really pretty simple.  When they vest, the value on the date of vesting becomes ordinary income.  This ordinary income should be included in Box 1of your W-2.  Because you are taxed on that amount, that is also your cost basis.  When you enter your RSU transaction you should enter the value that was included in Box 1 of your W-2.  If you did not sell all of your shares/units upon vesting you will have to do a little math and determine the cost per share.  If your employer did not include the value of the RSUs in box 1 of your W-2, you will have to add it t your tax return as additional compensation income. 

[Mike9241]

there are two types of non-covered securities. One where neither cost nor tax basis is reported to the IRS and the other where proceeds but not cost is reported.  the first type would be categoty/class C or F. the second would be category/class B or E. unsure? ask the issuer.

B & C are for short-term and E & F are for long-term 

in any event that 1099-B was sent to the IRS so you need to  report it on your tax return  

[jtornga]

David, you say the cost basis for a RSU transaction should be the value that was included in Box 1 of your W-2.

That would be the gross amount of the RSU. Shouldn't the cost basis be the proceeds or net amount after tax? 

[johnstearns611]

The brokerage firm sent me both the proceeds for the non-covered security transaction and the cost basis. But the cost basis does not appear in TurboTax. Do I have to enter it manually? Or is there some way to make sure that information, that is, the cost basis is included?

Thanks!

John

[Mike9241]

What do you mean sent?  If you imported the 1099-B, usually the proceeds and cost basis transfer to Turbotax even if the broker does not send the cost basis to the IRS. These are types b,c,e,f,x

[johnstearns611]

I did import Form 1099-B from my broker. The proceeds from both the covered and noncovered securities were captured by Turbotax. The problem is that the total of both proceeds are combined in Box D instead of using a separate Box E. Only the covered cost appears in the Cost Basis column. The noncovered cost does not appear at all. This causes the app to report a huge gain that does not exist.

I would rather have TurboTax enter the noncovered cost basis. As a last resort, I am willing to enter the amounts manually in the correct Box D and Box E. However, I am not able to override the data in either the Form 1099-B wks or form 8949. Is there any way to override the totals? I hope that I don't have to do the entire tax work by hand out of desperation.

This may be a very serious bug. It's possible that I am doing something wrong or that there is a problem on the brokerage side. 

What do you suggest? Thanks. 

John

[johnstearns611]

I spoke with a TurboTax support report and she helped me solve my problem. I appreciate her patience as I attempted to share my desktop with her. She guided me step by step through the process of changing the Form 1099-B data so that my covered and noncovered security sales displayed both proceeds and cost basis amounts correctly. 

I mistakenly tried to enter the correct security cost basis on a form 8849. She showed me how to make the correction using step by step more.

She also solved a separate problem where there were duplicates import quantities. She gets a 5-star rating in my book.

[amarkb7]

How did you do that? They should place a video tutorial for this, I am also facing this, and today, no one is available to help.

[fanfare]

Use the step-by-step to add or edit your 1099-B

Check the box indicating you have other boxes on your 1099-B to enter, such as Basis.

IRS Says:

"For non-covered securities ( BOX B or E) showing zero (wrong) basis, enter the correct basis yourself.
Use code "B" and put -0- in col (g). "

In prior versions, I found, TurboTax will do that.

@amarkb7 

[johnstearns611]

I hope Fanfare was able to answer your question, amarkb7. If you are in forms mode, open the flagged file and click the errors icon in the upper left corner. Then try to decipher the message. Hope this helps, John