Unable to delete or correct ESPP transaction

[lwilpan]

I'm using TurboTax Deluxe Desktop, and I have ESPP (Employee Stock Purchase Plan) transactions on my tax return. One of these stock transactions is marked "Needs Review", but when I select it, the only option I have is Bulk Edit, and the changes I make with Bulk Edit don't appear to be saved. Then, when I get to the Federal Review stage, I get the following errors:

"Capital Asset Sales Worksheet ([brokerage]) -- Capital Asset Sales Wksht (1) -- Capital gn (ls) adjustments/other info (sh [employer]) -- Employer Stock Worksheet: Line 4 must be entered."
"Capital Asset Sales Worksheet ([brokerage]) -- Capital Asset Sales Wksht (1) -- Capital gn (ls) adjustments/other info (sh [employer]) -- Employer Stock Worksheet: Line 10. Type of stock plan must be checked"

Line 4 calls for the number of shares purchased, which my brokerage didn't include in my tax forms.

I did select the type of stock plan in the step-by-step instructions, so I don't know why it wasn't filled out on this form, except for the following:

Part of the problem with this transaction is that it was not directly purchased under the ESPP; it came from reinvested dividends. My brokerage doesn't provide the same information for the sale of shares from reinvested dividends as it does for the sale of regular ESPP shares. I'm not certain whether these reinvested-dividend transactions should be reported as ESPP shares or as "Stock (non-employee)" or something else. I think the root cause of this problem is that I entered these shares as ESPP shares but then tried to change them to Stock (non-employee because TurboTax asked for the corrected cost basis, which my brokerage only provided for true ESPP shares, not for reinvested dividends.

How do I correct these errors and move on?  I've tried deleting the offending forms, but TurboTax just re-creates them.  I would like to try deleting the offending transaction in Step-by-Step mode and re-entering it, but TurboTax doesn't allow that.  About the only option I can see is to delete the entire 1099-B and start over, but it took me almost an hour to enter all of those transactions.

[ReneV4]

To correct the errors and move on, report your shares acquired from reinvested dividends as regular stock transactions, rather than ESPP shares. When you opt to use your dividends to buy more shares of stock rather than receiving the cash, they are treated as new, separate purchases for tax purposes. 

If you initially coded the transactions as ESPP, TurboTax generated an Employer Stock Worksheet in the background. Now, it's requiring ESPP-specific information for a transaction that doesn't have it.

Since you are using TurboTax Desktop, use Forms Mode to look for and delete (Delete Form at bottom left of screen) the Employer Stock Worksheet associated with that reinvested dividend transaction. 

Next, open the Captial Asset Sales Worksheet for your brokerage to find the specific row for the reinvested dividend transaction and ensure it is coded as a standard stock sale, or delete just that specific row and re-enter it. This should remove the hidden ESPP worksheet causing the Federal Review errors and allow you to move on with filing your tax return.

The basis for these newly acquired shares is generally the amount of the dividend used to purchase them. The holding period for each new share purchased begins the day after that share was purchased.

However, if you participated in a Dividend Reinvestment Plan and received the stock at a discount, your basis is the fair market value of the stock on the divident payment date. You must also report the discount amount in your income. 

[lwilpan]

Thank you for confirming that these transactions should be entered as regular stock purchases.  I assume that's what the "Stock(non-employee" option is for.

I saw the ESPP worksheet for that transaction and tried to delete it, but TurboTax just re-created it.  I ensured that the corresponding line on the Capital Asset Sales worksheet is set to Stock (non-employee), but TurboTax still keeps re-creating the ESPP worksheet.  I don't see any way to delete the whole line on the Capital Asset Sales worksheet.  The closest I can come is to blank out as many fields as I can edit, but that doesn't make the line go away, nor does it stop the ESPP worksheet from being re-created.

[RobertB4444]

The worksheet is not transmitted with your tax return so you should still be able to file your return with no effects from the worksheet.  But the only way to unring the ESPP bell is to delete and re-import the entire kit and kaboodle again and then not notify the system that there are any ESPP transactions this time.  Once that is done it should file smoothly.