There has been a change by the IRS starting with the 2020 tax returns that will reject any return filed with a negative number reported in the proceeds or cost basis fields for Schedule D. TurboTax is flagging these situations ahead of time before the return is filed in order to prevent the IRS rejection. Some brokers are still using the old convention for reporting negative values and have not updated their reports to match the IRS.
The error message reported by TurboTax is telling you that the number entered cannot be negative.
Gains from expired options are reported by entering the gain amount in the proceeds column and no amount in the cost basis column. The end result here would be positive.
Losses from expired options are reported by entering the loss amount in the cost basis column and no amount in the proceeds column. The end result here would be negative.
No negative numbers should be entered in either the cost basis or proceeds fields.
If negative numbers have been imported through your brokerage statement, you will need to edit the entries to make the correction.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
No, you should not enter a zero. As you indicated this will create a positive overall income adjustment which is not what you want.
There are a couple of options (no pun intended), that you might try that should eliminate this experience.
These particular steps may provide the ability to post a negative value to form 1099-B, Box 1d.
- Select the option for a 1099-B
- Select to type it myself
- Enter Bank
- I'll enter one sale at a time
- Enter the stock data and leave 10d BLANK
- When you hit Continue you will get a RED error message
- At the bottom of the screen select Allow me to continue with incomplete information > Continue
- Any less common items will be blank. Select Done
- No this is not employee stock
- Select the last item An adjustment is required for reasons not already covered.
- Enter the negative number that you had in Box 1d.
- This will complete the transaction
Another option is to put $1 in the proceeds box and then add that $1 to the negative gross proceeds as your cost basis (positive figure). This will provide the accurate results of income and tax. The most important thing is the correct end results on the tax return.