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March 19, 2021
Question

1099-Q Cost Basis is zero?

  • March 19, 2021
  • 1 reply
  • 0 views

Hello, 

 

My 1099-Q has a Box 3 cost basis of $0. Is that correct?

 

The stocks were originally purchased years ago at 25% of the current price. Shouldn't the purchase price be the cost basis? 

 

Thank you for your guidance, 

1 reply

Hal_Al
Employee
March 19, 2021

I assume this is for an ESA distribution and box 2 is also 0 or blank.  This means you have to calculate the earnings portion of  the distribution. TurboTax will ask you to provide you total contributions and adjusted cost basis.

 

The payor should have reported the fair market value (FMV) as of the end of the year in the blank box below boxes 5 and 6. Labeling the amount "FMV."