1099b with only 1a-c-d, 4 &5. TTax2017 unhappy. HOW to correctly submit so TTAX Deluxe happy?

[jlwilkinson]

Had a disability policy that paid quarterly dividends for years.  Company spun off a new company, 10 shares from original at a 1 to 11 distribution rate.  Rather than fractional shares, cash-in-lieu was issued (just over $50 in my case). 

New company issued 1099-B with only fields 1a, 1c, 1d, 4 ($0) and 5 (x) filled in.

Turbotax is not pleased with only this information, but after trying several times, guessing and using "various" for original date of acquisition, $0 for cost basis, etc, nothing seemed to change the bottom line of my refund amount, while TTax still complains during reviews and final check.  Latest try reports a complaint about "Capital Gain Wks , Part II line 2 is shown as 10 shares.  But only 0.90910 shares are shown as acquired" -- so how do I satisfy the program and the IRS without the additional information needed?  There are no "brokerage" records to consult.

[TomYoung · Accepted solution]

You are clearly talking about the spin off of Brighthouse from MetLife.

I assume you got your original MetLife stock in the demutualization of MetLife back in the year 2000.

If that assumption is correct then you basis in MetLife is $0, per the IRS.  (Though, there's an ongoing dispute about that.)

When a company is spun out of another company in a tax free spin off then you allocate your basis in the original stock between your original holdings and your new holdings in proportion to their values immediately after the spin off.  The recommended percentage allocation in this case is 10.3635%, so 10.3635% x $0 = $0 and that's your basis in all the Brighthouse stock you received, which I assume is the fractional share of .909091.  Further, when a company is spun out of another company in a tax free spin off then the holding period from the "old" stock carries over to the "new" stock, so your holding period also dates back to the year 2000.

So now you have all the information you need to enter the sale, the same information that shows up for every single sale of a security on Form 8949.

1. Description of what was sold: Brighthouse Financial stock.  (You don't need to indicate how many shares but if you want to, add that in.)
2. Date of sale: 8/7/2017
3. Proceeds of sale: $53.37
4. Cost basis: $0
5. Date acquired: 4/7/2000

Delete that stock sale and simply enter that information in TurboTax's default "fill in the blanks" security sale entry form.  Since basis isn't being reported this would be a Box E trade.  If you really had taxes withheld on this sale - your "Box 4" reference means that - then click the blue "I'll enter additional info..." button and that box will become available to you.

Tom Young

[jlwilkinson]

Thank you sir!   Obviously the MetLife->Brighthouse sale was a messup that a lot were impacted by.

[cnsteinmetz]

One additional question, what Sale Category should be used. Perhaps Long Term Non Covered?

[TomYoung]

Well in the OP's case that's certainly a "Yes" but it really depends on WHEN the MetLife stock was acquired.

[vkapio]

Thrilled to find this answer!!!! Guess there are a lot of us with this same question, did not find this answer on turbotax search but did on google search.  Unhappy that I have to pay $20 more for the right program to enter this information when I only got $59 from this transaction.  THANK YOU TOM YOUNG

[Jim-Thompson]

My exact situation also.  I add my many thanks.