How to handle stock sales?

[Tax2019Pay]

Thanks.  However, in my case, it was one stock option grant, say 1000 shares, so identical cost base for the 1000 shares.  I just exercised, say 100 shares at a time.  My understanding from your answer, is that even the same cost base, being all short term covered without any adjustment, I still need to report one exercise at a time.

Am I right, for ordinary stock sale, you are still allowed to summarize all transactions under one category such as short-term covered without need for adjustment - without having to report individual sales separately, correct?

[Tax2019Pay]

Just to run this through again to make sure I explained correctly.

Here is the background.  I had 1000 shares of company stock option granted on July 15, 2020 and vested on July 15, 2021.  I exercised the options in 100 share lot x 10 times between Jul 15, 2021 (each time with immediate sale for cash).  In January 2022, I received a W2 (with box12a showing "V")  from the company for the gain; and I also received a consolidated 1099B with a summary of the total proceed and cost base, and as well as detailed information for each of 10 option exercises.   These option exercises/sales were reported as short term covered without the need for any adjustment.  Since the 1000 shares of option came from the same lot, so the cost base was the same.

I entered the W2 information and 1099B information as shown in these tax forms.  But I need to add the W-2 amount to the cost base number on 1099B to avoid being double taxed.  My problem is that I do not know how to do that to make it clear to the IRS.  

Am I allowed to summarize all these 10 option exercises/sales into one consolidated proceed and one consolidated cost base, or do I have to enter one option exercise/sale at the time and enter 10 times?  If I am allowed to summarize, how do I add the cost base from W2?  In the summary mode, there is nothing in TurboTax allowing me to do the cost base adjustment - I guess that I could just add the W2 amount to the 1099B cost base - but wouldn't IRS be confused by this?  If I enter one option exercise/sale at a time, TurboTax will ask me if it is an employer stock option and lead me to run through a worksheet to do the adjustment but that is 10 worksheets to go through.  

So I want to make sure that I can  (1)  enter in summary without having to list individual transactions, (2) adjust the 1099B cost base by adding the W2 box 1 stock transaction amount to the 1099 base, and (3) since these transactions were all short term covered without the need for adjustment, I do not have to mail in Form 8949 to IRS after eFile in Turbo Tax.   Am I correct with the above?

[RobertB4444]

You are correct with all three.  But if you enter in summary you should attach your 1099-B to the efiled return.  TurboTax will help you do that.

[Tax2019Pay]

Hi Robert: Doesn't the IRS has already received the 1099B from brokerage?  Why do I need to attach it again? Thanks

[JohnW152]

You're correct -- the IRS does receive the 1099-B forms but, since you're summarizing the transactions, the presence of the forms helps with the matching process, should it be necessary.

[Tax2019Pay]

Hi Dawn C:

Just a follow-up to this old Q&A.  If one has to add last year's disallowed wash sale amount to the base to this year's stock sale, in addition to enter everything into Turbo Tax, does one have to mail anything to IRS?  

According to TurboTax, "When you enter investment sales or exchanges from Form 1099-B or 1099-S in TurboTax, we'll automatically fill out Form 8949 and transfer the info to Schedule D. You don't need to fill out the 8949 yourself".

[NCperson]

@Tax2019Pay - if you import the transactions from the broker, TT will take care of everything.... 

if you are doing this manually, you just have to enter the summary of each category (A-F) from the broker, each trade doesn't have to be entered.  TT will ask whether you want to enter each trade or enter the summary 

[Tax2019Pay]

Thanks.  I assume that if one needs to do cost base adjustment, one has to enter manually, correct?

If one efile, is there any scenario that one has to mail certain paper documents such as 1099B or Form 8949 etc to IRS?  

Thanks again.

[Mike9241]

@Tax2019Pay  unless you switch brokers or are using a non-US broker, the broker, if it recognizes that a wash sale has occurred, will usually make adjustments to the cost basis of the "replacement" securities for the disallowed wash sale loss. 

a way to check is to look at the trade confirmation for the "replacement" security and compare the cost on it to what the broker is reporting on the 1099-B as the cost. 

however, in certain situations, the wash sale may not be recognized by the broker and you're on your own.

such situations would occur if an IRA is used to purchase "replacement securities" or if you have multiple security accounts even if they're with the same broker. there could also be other situations where the broker does not recognize the wash sale but you still have to,

[mgtd]

Where do you report income from a 1099-B 

[DoninGA]

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@mgtd wrote:

Where do you report income from a 1099-B 

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To enter an investment sale from a brokerage account (1099-B), follow the steps below.

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Under Investment Income
On Stocks, Mutual Funds, Bonds, Other, click the start or update button

Or enter investment sales in the Search box located in the upper right of the program screen. Click on Jump to investment sales