How do I indicate a QSBS section 1202 exclusion? I found an answer for how to do this for tax year 2019, but it doesn't seem to work in this year's version.

These instructions are outdated, and the screenshots you're referencing don't show up.

When I click the 1099-B link I don't see "Summary of All Accounts", I see "Your investment sales summary."

When I click edit there, there is no "guide me step by step flow" or any "My sales involves one of these uncommon situations" links.

Can you please share some instructions for the latest version of Turbotax online?

I FOUND A WORKAROUND FOR THE 2023 QSBS GLITCH. Entering QSBS info is broken in TT 2023. If you follow the program's procedure the result on Form 8949 is no gain adjustment: i.e. you are paying full tax on the QSBS income. 

This approach works. In the step-by-step procedure for manual stock sales, enter the stock sale info for the QSBS shares as if they were not QSBS: on the screen where the "this is small business stock" check box occurs, ignore that check-box and instead check "none of the above" at the bottom of the list. Complete entry of all of your QSBS stock sales. 

Then, switch to forms mode, and find the Form 1099-B worksheet that contains the stock sales that should be QSBS. Under this worksheet in the forms list you will see a Capital Asset Sales worksheet: open this. You will see a section for each of you stock sales. In each of these sections, make two edits. 1) in the "adjustment amount" box for each sale enter the amount by which the gain on that sale that should be reduced as a negative number. 2) in the "adjustment codes" box enter "Q" (without the quotes"). Now go the the copy of Form 8949 that contains these stock sales, and you will see that they appear correctly: the adjustment reduces the gain per QSBS rules and the correct adjustment code Q is displayed.

Also, if your QSBS income comes from a K-1, there is another glitch. QSBS income appears on K-1 line 11. If you enter the line 11 income into the TT K-1 input form, the line 11 income (i.e. QSBS) income is included in the Schedule E income totals. This means you are taxed on this income as ordinary income. Hence you need to leave line 11 on the K-1 entry form blank and enter the QSBS income into the Capital Asset Sales worksheet as described above.

Todd Hixon

Long time TT user, rather disappointed with TT-23

i too have tried this countless times - it is really frustrating - let us know if you get anywhere with your case

Yes, you may report the sale of Qualified Small Business stock eligible for Section 1202 exclusion as an investment sale following these steps in TurboTax Online 2021. Please note the Learn More links throughout this process that may answer questions you have about a particular choice.

1. Go to Federal >> Income >> Stocks, Cryptocurrency Mutual Funds, etc.
2. Click Start or Add more sales
3. Choose Stocks, Bonds, Mutual Funds (1099-B)
4. Choose I'll type it in myself and enter Bank or Brokerage name
5. Choose No for Employee Stock
6. Choose No (1-3) for More than three sales
7. Choose Yes for Other types of investments (this is most important for section 1202)
8. Choose Yes for Did you buy every investment?
9. Choose One-by-one for How to enter
10. Under Sales section title, choose Long term or Short term, did not receive 1099-B
11. Under Type of investment, choose Stock (non-employee)
12. Enter dates, proceeds, and basis for your sale
13. Under Let us know if any of these situations apply to this sale, choose This is a small business stock (see screenshot)
14. Under What kind of small business stock did you sell? choose Qualified Small Business (section 1202) (see screenshot)
15. Continue to back to the Investment Sales Summary page.

The Desktop program offers Section 1045 which you must first select, 

after entering zero for replacement property, the program will default to section 1202. 

DESKTOP-

       Federal 

Wages & Income

Investment Income

Stocks, Cryptocurrency, Mutual Funds, Bonds. Other

Start or Update or “Add more sales” 

Select  “Stocks, Bonds, Mutual Funds (1099-B)”

Skip Import, Select I'll type it in myself and enter Bank or Brokerage and CONTINUE

Select No for Employee Stock

Select No (1-3) for More than three sales

Select Yes for “Other types of investments”

Select Yes for “Did you buy every investment?” and CONTINUE

Select One-by-one for “Now, choose how to enter your sales” and CONTINUE

For the Sales section drop-down choose “Short-term or Long-term did not receive 1099-B”

For Type of investment, Select Stock (non-employee)
Enter Description, Dates, Sale Proceeds, and Basis and CONTINUE 

Select “This is a small business stock” for the “Let us know if any of these situations apply to this sale”, screen and CONTINUE

Select “I don’t want to make any changes to my cost basis right now” and CONTINUE

Select Qualified Small Business (section 1045) on the “What kind of small business stock did you sell?” Screen and CONTINUE 

Enter zero for the cost of new qualified small business stock and CONTINUE

The next screen shows this as 1202 sales since no replacement was purchased.