TomYoung
Level 12
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Activity Feed for TomYoung
- Got Cheered for Ultimately you're going to report the adjusted cost basis.... 4 hours ago
- Posted Re: Need to include 'sell to cover' shares used for tax withholding and listed on 1099-B as part of vested RSUs as sold shares on Form 8948? @TomYoung on Investors & landlords. 6 hours ago
- Got Cheered for You are wrong in your assertions. First, Box 14 on the W-.... yesterday
- Got Cheered for Your comment about "already entered the number of shares.... Thursday
- Got Cheered for With the sale of ESPP stock you have 2 ways of entering t.... Tuesday
- Got Cheered for The main functional difference between online Premier and.... Monday
- Got Cheered for Yes. Although payers don't have to provide a 1099-INT fo.... a week ago
- Got Cheered for A well-written rebuttal to a position or opinion one has.... a week ago
- Got Cheered for The reason that you are getting double taxed when you ent.... a week ago
- Got Cheered for "My form had it as $0.00 is this correct?" No, it's not c.... a week ago
- Got Cheered for Merrill Lynch's statement might be confusing to you becau.... a week ago
- Posted Re: It sounds to me like you are not entering the cost basis... on Get your taxes done using TurboTax. 2 weeks ago
- Got Cheered for Is there a BUG i nthe AMT interview? (Desktop verions). 2 weeks ago
- Got Cheered for Assuming that you are having enough withholding taken fro.... 2 weeks ago
- Got Cheered for Re: When I enter Adjusted cost basis from ETrade, should I also check 1099-B reports incorrect cost basis?. 2 weeks ago
- Got Cheered for Re: In the main Box 14 of the W-2 is a "memo" box where your.... 3 weeks ago
- Posted Re: In the main Box 14 of the W-2 is a "memo" box where your... on Get your taxes done using TurboTax. 3 weeks ago
- Got Cheered for "Does TurboTax handle cross account wash sale cost adjust.... 3 weeks ago
- Got Cheered for I can only guess that you are using the RSU step be step.... 3 weeks ago
- Got Cheered for Here's the TurboTax FAQ that answers the "how many" quest.... 3 weeks ago
6 hours ago
When you sell a stock you must tell the IRS the correct basis in order to get the correct gain or loss on the sale. Stocks acquired via an RSU simply do not have a basis of $0. The correct per share basis is the same as the per share "fair market value" used by the employer to calculate the compensation created by the grant vesting.
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2 weeks ago
Just an update here to say that apparently Schwab DOESN'T know how to calculate wash sale losses correctly. I had a wash sale loss this year (2020) and Schwab calculated the incorrect deferred loss. The deferred loss on the 1099-B was exactly twice the correct amount. I've spoken to Schwab and they have acknowledged there was an error in their calculation. I would guess that this wasn't a simple "one-off" error and I just happened to be the only unlucky individual in their universe of clients. You might want to make your own calculations. Tom Young
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3 weeks ago
1 Cheer
@MarilynG1 "Your employer will send you Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c), if you purchased stock during the tax year." Form 3922 pertains only to stock acquired via an ESPP. It's not going to be issued for an RSU.
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a month ago
1 Cheer
@tgomax I "retired" as a SuperUser when TurboTax switched to the "CHAMPIONS!" program, (queue up Queen's "We Are the Champions"), but still get notifications when things happen over here, and sometimes I respond. First, since you are on the accrual basis indicating on your income tax return $100K of revenue and $900K of deferred revenue is absolutely the correct accounting. You have no real exposure to the taxing authorities if you are correctly reporting your taxable income. Second, even if the IRS would contact you you certainly would not be undergoing an "audit" in the correct sense of the word. A more correct word to use here would be "inquiry." Your situation of getting a dollar figure on a 1099 that well exceeds the correct amount of income to report in this situation has got to be fairly common and one would hope that a well-written explanation of the transaction, perhaps with appropriate supporting documentation, would put the issue to bed. (I use the word "hope" because the taxing authorities sometimes are extremely - maybe purposely? - obtuse so sometimes you have to do some back-and-forth with them.) You'll need to make the judgement here whether the cost to you of responding to the inquiry times the probability of them actually making the inquiry is more or less than the $2.5K cost of reporting the entire $1M as revenue.
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February 4, 2021
6:10 AM
"I'm confused, I thought that a 1099K for personal items sold at a loss was not reportable or deductible." You are absolutely correct. It's perfectly OK to not report Form 1099-K on your federal income tax return when the dollars reported on the 1099-K pertain to you ad hoc sale of personal property at a loss. It's exactly the same situation as when you hold a garage sale to get rid of the junk you've accumulated and all the proceeds are in cash. Well, it's exactly the same except that the IRS gets that Form 1099-K with some dollar amount on it , while they never know and have no way of knowing about the cash from the garage sale. So there is a chance - a very, very, very small chance in my opinion - that the IRS might send you a communication of some sort asking "where's that Form 1099-K on your income tax return?" In this situation you'd think a polite letter back to the IRS explaining the situation - sale of personal property at a loss - would put the issue to bed. But, with the IRS, you never know. Because so many people live in terror of the IRS even looking their way, all kinds of "workarounds" have been devised to "report" the 1099-K proceeds with some sort of offsetting costs such that there's no affect on taxable income. The hope is that the IRS computers make some sort of "match" on your income tax return to that Form 1099-K, and leave you alone. But, with the IRS, you never know.
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January 18, 2021
12:15 PM
@torchill You may very well be right about the "2020" aspect. For some reason I was thinking that you were really referring to the 2019 tax year, and that's the way I was responding. I haven't even looked at the "tax year 2020" TurboTax program at this point. I expect this might be an "early-season" bug. Sorry for the confusion.
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January 18, 2021
9:38 AM
@torchill I ceased being a SuperUser when when Intuit switched from SUs to the "Champion" program, so I'm not going to take a deep dive here, but I'll mention a few "top of mind" thoughts. The TurboTax 2020 program is completely capable of properly reporting the sales of stock acquired via an ESPP if you enter the sale correctly, a process TurboTax made more tricky a few years back. This isn't a "TurboTax 2020" issue. The page that comes up asking about what's been reported on your W-2 comes up as the very last page of the "Stocks, Mutual Funds, Bonds, Other" interview, it doesn't come up when you enter your last security sale. You have to keep going with the interview, hitting "Continue" or whatever until you come to that page. Some years back TurboTax changed how that page works. The way it used to work was that TT said "here's the ordinary income we've calculated from your ESPP sales, how much of this is already reported on your W-2?" TurboTax had a box on that page where you could enter that number, (most commonly that number reported on the W-2 would be associated with short term sales only), and if you had compensation associated with long term sales, TurboTax would include the difference on your income tax return as compensation income. That box in no longer on that page. Now, when TurboTax tells you how much compensation it's calculated you can only answer "Yes this is on my W-2" or "No this isn't on my W-2." So if your ESPP sales are both long term and short term and both classes of sales created compensation, neither answer is correct. This last issue can be circumvented in about 3 different ways and I posted those workarounds many times since TurboTax changed things. I think if you look around in the forum you should be able to find one of those posts and figure this out. (torchill: I had some problem following your post so maybe posting the details of one problem sale - complete with screenshots - might help somebody grasp the issue in a more tangible way. )
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October 18, 2020
5:18 AM
October 16, 2020
7:37 AM
2 Cheers
Here's something that might or might not help: The detail information you enter about all the 1099-MISCs you receive is not included in the income tax return you send to the IRS. All the IRS sees is a lump sum of "Gross receipts or sales" on line 1 of Schedule C. If you have multiple 1099-MISCs you've entered, and perhaps some revenue not reported on a 1099-MISC, the IRS just has no visibility to the fact that you've entered a dollar amount that's less than the amount on this particular 1099-MISC. So if you have multiple revenue sources beyond this one 1099-MISC I'd say "make a note on the 1099-MISC of exactly why you used a different number on your TurboTax entry than the one shown on the 1099-MISC and save that 1099 - along with all your other 1099's - with your paper copy of your 'as filed' income tax return." Your only obligation as a taxpayer is to report your income correctly, not blindly enter incorrect information that's contained on a 1099-MISC. If this 1099-MISC is your only revenue source then you can do exactly the same thing - enter the correct number, not the one printed on the 1099-MISC. If the IRS ever comes calling you explain the situation and that should be the end of it because you've reported your income correctly. If you don't want to do this, and I assume this is Schedule C income, then make up an expense that gets your net business income correctly stated. What you call it is your choice since it's highly unlikely that any person will actually read what you entered.
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October 15, 2020
1:42 PM
1 Cheer
You say "salary" but partnerships don't pay salaries to partners, they make "Guaranteed Payments" which are ordinary income to you and generally subject to Self Employment taxes. However, payments to you that affect only your capital account with the partnership are typically treated as "draws" - a "return of capital" concept - and would not be taxable until your basis is zeroed out. Partnership law being what it is the reality is that the above two sentences are gross generalizations that aren't always true. And, I can't see anyway the claim of rights angle comes into play here. If the payments made to you were legally guaranteed payments for services performed, (I think that has to be part of the partnership agreement to stand up). then your past reporting makes sense, but the partnership's reporting doesn't. This could be a situation where the partnership has to amend its prior income tax returns, (if "in the past" does refer to prior years), meaning all the partners would also need to amend. Find some competent local help.
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