Solved

I sold company stock & taxes were withheld, reported to the IRS and the income from this is part of my W2. Fill out a 1099B or is my W2 of reported earnings enough?

Forum|Forum|7 years ago
June 3, 2019
1 reply
0 views

it's unclear to me how to handle the selling of stock if taxes were already withheld and reflect as part of my income. Is there anything else I need to do?

TurboTax Premier Online

Best answer by TomYoung

Yes, you need to enter the 1099-B too. The IRS gets copies of all 1099-B's and will look to see if you've reported yours.

The secret here to avoid "double taxation" when you report the sale is the use the correct basis. The correct basis for the GROSS number of shares - before shares are "withheld" or "sold" for taxes or for exercise - is the sum of what you paid for them plus the compensation income created by the vesting/exercise/sale - depending on your plan. If your 1099-B doesn't report the GROSS number of shares being sold then translate the basis into a per-share basis figure and use that to calculate the basis to report with your trade.

It's highly likely that the 1099-B DOESN'T report the "correct" basis so you probably will have to correct it. That's because the brokers do not have to report the "compensation" element of your basis.

Using the spreadsheet-like "fill in the boxes" default TurboTax 1099-B entry form, enter the 1099-B exactly as it reads. Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation." Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add." That will allow you to add the missing amount of basis and TurboTax will show all this correctly on Form 8949.

Tom Young

NOTE: TURBOTAX CHANGES THE SECURITY SALES INTERVIEW JUST ABOUT EVERY SINGLE YEAR. WHILE THE TAX CONCEPTS THEMSELVES IN THIS AREA GENERALLY DON'T CHANGE, THE INSTRUCTIONS ON "HOW TO FIX" THE BASIS REFLECT THE STATE OF THE INTERVIEW FOR TAX YEAR 2015.

T

TomYoungAnswer

Employee

Yes, you need to enter the 1099-B too. The IRS gets copies of all 1099-B's and will look to see if you've reported yours.

The secret here to avoid "double taxation" when you report the sale is the use the correct basis. The correct basis for the GROSS number of shares - before shares are "withheld" or "sold" for taxes or for exercise - is the sum of what you paid for them plus the compensation income created by the vesting/exercise/sale - depending on your plan. If your 1099-B doesn't report the GROSS number of shares being sold then translate the basis into a per-share basis figure and use that to calculate the basis to report with your trade.

It's highly likely that the 1099-B DOESN'T report the "correct" basis so you probably will have to correct it. That's because the brokers do not have to report the "compensation" element of your basis.

Using the spreadsheet-like "fill in the boxes" default TurboTax 1099-B entry form, enter the 1099-B exactly as it reads. Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation." Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add." That will allow you to add the missing amount of basis and TurboTax will show all this correctly on Form 8949.

Tom Young

NOTE: TURBOTAX CHANGES THE SECURITY SALES INTERVIEW JUST ABOUT EVERY SINGLE YEAR. WHILE THE TAX CONCEPTS THEMSELVES IN THIS AREA GENERALLY DON'T CHANGE, THE INSTRUCTIONS ON "HOW TO FIX" THE BASIS REFLECT THE STATE OF THE INTERVIEW FOR TAX YEAR 2015.

R

rchilarioAuthor

This is INCREDIBLY helpful! I haven't received the 1099B just yet (I read the broker has until Feb 19th). However, I will follow these instructions exactly as directed. Thank you so much!