Question

Should I change the cost basis to the value from "Adjusted Cost Basis" when I import 1099-B from my e-trade account?

Forum|Forum|6 years ago
June 7, 2019
1 reply
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I imported my 1099-B from my etrade account. The form includes transactions for RSU and NQSO. The cost basis value imported to turbo tax was the one under Cost Basis column. But I have another column which is Adjusted cost basis (addition of cost basis and adjusted amount(ordinary income)) on my Stock Plan Transactions Supplemental Information.

What should be reported to IRS. Cost basis or Adjusted Cost Basis?

TurboTax Premier Online

T

TomYoung

Employee

What's reported to the IRS in the "Cost Basis" column, (your out of pocket cost), and that's what you enter. But then you click the blue button that refers to "additional info" and enter the correct basis - the Adjusted Cost Basis - on the page that shows up. TurboTax shows the "as reported by broker" and "as adjusted" on Form 8949. Very common when employee stock incentive programs are involved.

Tom Young

M

mitdesai21Author

Thanks! So at the end the gains/loss is eventually calculated based on the corrected value and not the actual cost basis. Right? Let me know if the following example is correct.
Lets say 1 RSU vested (after the taxes were deducted) and the stock price was $10 on vest. And I sold it at $11 on the next day. The cost basis will be 0. But the Adjusted Cost basis will be $11 indicating that I had $1 short-term gain. So when filling out the details in TT, I will have cost basis at 0 and on the next page, the adjusted cost basis will be $11.

T

TomYoung

Employee

@mitdesai21

You don't have a correct understanding of the situation, at least not as you've expressed it in your post.

"So at the end the gains/loss is eventually calculated based on the corrected value and not the actual cost basis. Right?"

No. At the end the gain/loss is calculated based on the corrected value which is the actual cost basis. It's not calculated based on the erroneous cost basis (typically "$0") shown on the 1099-B.

"Lets say (an) RSU vested...and the stock price was $10 on vest. Sold it at $11 on the next day. The cost basis (reported by the broker) will be 0. But the Adjusted Cost basis will be $11 indicating that I had $1 short-term gain."

No, the Adjusted cost basis will be $10, giving you a $1 short term gain.

"So when filling out the details in TT, I will have cost basis at 0 and on the next page, the adjusted cost basis will be $11. "

You'll enter the 1099-B exactly as it reads, showing a $0 basis. Then on the next page you enter the correct "adjusted" basis to $10.

I think you actually do understand what's going on here, but just expressed it incorrectly.

Just to be clear, you'll enter the 1099-B exactly as it reads, incorrect "$0" basis and all, and then correct the cost basis on the next page.