Options transactions are flagged and need review of each transaction. This is getting too annoying. Can we leave it like that and paper file?

[Achar1992]

I have options transactions (Sold options) that have been reported on 1099B. Now turbo wants me to review each as they have categorized it as non employee stock and update each transaction...How do I deal with this or is it time to drop Turbo tax from 2021..

[Mike9241]

if these are noncovered options and expired then probably the $0 cost basis is missing and needs to be entered for each.  can't say if the issue is with Turbotax or the way the broker formatted the info for import.

if these are all covered options, then don't import assuming there are no wash sales or other adjustments to basis. go to the wages and income section. in that section gp to 1099-b or broker's statement and click on start for Stocks, etc. then yes. then continue. then yes. then I'll type myself.  select brokerage (don't know why TT want's this since this info is not sent to the IRS. then I'll enter a summary - enter total sales price and total cost. then for sales category select BOX A. - you're done

if you have trades other than options you can enter summary totals for each sales category. then send the IRS form 8453 with a opy of form 1099-B. follow the instructions on form 8453 

[fanfare]

Believe it or not, for some of these warnings, you can go on to FILE and it will go through.

You have nothing to lose by trying, as long as everything else is finished and correct.

If you don't have wash sales, using the "summary option" for your covered transactions is much more convenient.

[Achar1992]

Thanks, did the summary option and it looks fine FINALLY!! I was getting frustrated. Thanks so much for your detailed response!

[Achar1992]

thank you for the detailed response. Following you and what fanfare said, I did just that and now relieved and ready to file! I think I will totally stop importing these 1099Bs and type in myself henceforth. Its much better than editing!

[fanfare]

the rule (explained in IRS instructions) is :

a) covered transactions without adjustments do not require Form 8949.
b) covered transactions with adjustments (i.e. wash sales) must be detailed on some 8949 or your other forms in the manner of 8949.
--
If you summarize a) no mailing is necessary
If you summarize b) or summarize other categories either attach (*) or mail in the details .
(*) some users have reported TurboTax may prompt you to attach a PDF file of details.
Box A and Box D are your covered transactions.

a) is the only Exception to the IRS requirement to list in detail every closing transaction you make during the year.

[benjmsher]

from Schwab:  says IRS requires brokers to only report the net proceeds of a sold put option  

so why does Turbotax tell us all of our sold puts "needs review."  if I manually go in and add buy, sell, and their dates, i would seem to be violating IRS rules.  this is really frustrating for us put option sellers.  the brokers are correctly generating the correct IRS format on their 1099b's, and Turbotax is importing them correctly as proceeds info only.    here is the blurb from Schwab:  

"Scenario #2: Sell to open, then buy to close

What if the trader in the above example sold the XYZ put options contract to open at $5.30, then closed it out with a $1.16 purchase?

The 1099-B will show a proceeds amount of $4.14 ($414 with the multiplier, and it will be modified by transaction costs) and a basis of $0. The IRS mandates that a trader with a cash-settled, written contract report only the gain or loss as proceeds. A tax document will not reflect the $5.30 or $1.16 amounts, just the profit of $414 minus transaction costs.

If this had been a loss, the proceeds amount would be negative."

[pr0]

can you clarify please on the wash sale? wouldn't it be wash sell automatically since you are selling covered calls while you keep holding the stock?

Is it wrong to keep them as $0 cost basis?

Is there a preferential tax treatment to report them differently (I will need to delete each of the imported entries and report them somehow differently?)?

Thank you!!!