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HW11
Returning Member

Will Deluxe version deal with K1?

This is all new to me, so I don't really know what to expect. 

I bought shares in my company at fair market value and submitted an 83b.  Now I find out I have to wait for a K-1 form before I can file my taxes.  

My main question is whether I can still use the downloaded Deluxe version to file my taxes, or will I need to upgrade?

 

Another question I have is whether this will affect my taxes.  Please tell me if I'm understanding this correctly:

I bought the shares at fair market value, the 83b form makes it so I pay taxes on the value of the shares when I acquired them.  So, there should be 0 gain and therefore won't affect my taxes?  Is that right?

 

Thank you for any advice!  I'm starting to wonder whether buying the shares will be worth all this hassle!!

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1 Reply

Will Deluxe version deal with K1?

HW11,

 

There are a couple of questions you have raised.  Insofar as the 83(b) election, you are right that you have paid the tax already (and it was, or should have been, reported on your W-2) and there is nothing else to do insofar as I am aware until you sell it but there are AMT considerations for ISO's.  See this JP Morgan article for more insight into 83(b).

 

As to dealing with stock options in general, while TurboTax Premier has specific programming to facilitate entry of them, as a DIY'er  I was able to enter the correct information manually some few years back for my own RSU's but I did take the time and care to clearly understand where things actually went on the IRS forms.  I cannot guarantee that is still the case as I now use Premier, but, as noted above, your 83(b) pretty much obviates any tax acrobatics anyhow.

 

For K-1(1065)'s, and yes they are a headache!  Their generally late arrivals make it necessary to dig into the details via the investment company's contact information or your broker's in order to get a handle on how much extra money to include when mailing your federal and state extension forms.  Once you get them, you can enter them in Deluxe but Premier has additional programming to facilitate their entry.

 

Sorry I cannot be more authoritative, but I trust this moves in the right direction.

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