Stock Option 1099-B Cost-Basis Adjustment

[taxlini]

My stock option was included in the W2, but it also appeared on 1099-B causing double taxation.

The cost basis on 1099-B only covers the cost of stock price.

To adjust so I'm not double taxed, do I add the amount in 12c to the Cost-Basis in 1099-B?

Or replace the Cost-Basis in 1099-B with the amount in 12c?

Thank you so much in advance!

[FangxiaL]

You can make an adjustment while entering your 1099-B form information as long as you can find your cost. Check the box and continue. On the next screen, you will be able to enter the correct cost basis.

[taxlini]

Thank you for the response!

However, I do not see that checkbox in my view.

Is it okay to just sum cost basis on 1099B and amount in 12c?

[RaifH]

No, although this will get you there if you are referring to the amount in Box 12 with a Code V of your W-2. I'm assuming you are using TurboTax Desktop since you did not see the screen @FangxiaL showed you. To enter your stock option on TurboTax Desktop:

1. Enter the information on the sale from your 1099-B exactly as it appears in the Personal Income > Investment Income > Stocks, Mutual Funds, Bonds, Other.
2. Under Was this a sale of employee stock? answer Yes.
3. Select the type of stock option on the next screen.
4. After navigating through the following screens, TurboTax will calculate the amount that has already been included as compensation so that you will not be double-taxed on the sale of the stock.

The answer should be the same but doing it this way shows on the form submitted to the IRS the original basis and the adjustment to it. 

[taxlini]

Thank you for your response.

But I still do not see the option you have advised.

Please see the screenshot below.

Should I be utilizing "Total adjustments to gain or (loss)"?

If so, should I input box 12 amount as a loss? And what would be the adjustment code?

Thank you so much for your help!

[RaifH]

Ok, by process of elimination, I now see what screen you are on. I was using the I'll enter one sale at a time option, but you are entering it under I'll enter a summary for each sales category. It is easier to input there if you have multiple sales so you do not have to write them all out. However, if you are using the summary sales, you will have to include a copy of your Form 1099-B with your tax return to the IRS that shows every individual transaction. TurboTax will prompt you to include a pdf of your 1099-B.

On your screen, enter total proceeds and cost basis as reported on your 1099-B. Enter the adjustment as a negative number in the Total adjustments to gain/loss field. In the second field, put adjustment code B. The adjusted cost basis should be in the supplemental information provided by your broker or on your W-2. 

[rocky97103]

When I do this, then the W-2 worksheet seems to appear and its not reflective of the actual W-2, but the W-2 isnt altered in the turbo tax , seems like an audit shout out look at me. 

[ThomasM125]

The IRS won't see your W-2 entry screens. The W-2 worksheets in TurboTax are used to determine the correct entries on your tax return. The IRS will be mostly concerned about seeing your box 1 amount (wages) on line 1(a) of form 1040 and the box 2 amount (federal tax withheld) on line 25(a). You can look at your Form 1040 and verify that those amounts are correctly stated and if so your W-2 wage and tax withheld entries will correspond with what the IRS will have a record of. 

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done