How do I report a CUSIP item with proceeds from a sale of rights when the date of sale question is asked and I did NOT sell the stock?

Forum|Forum|5 years ago
March 31, 2021
2 replies
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The amount of the sale of rights was $10 so if I give a date of sale for that, Turbo Tax presumes that i sold the stock and counts the difference from the cost basis (also not given by me) as a loss. I did not sell the stock

TurboTax Premier Online

DianeW777

Where a shareholder does not take up his right to new shares but sells those rights to a third party, the proceeds are treated as a capital distribution and constitutes a part disposal of shares.

You should just report the $10 as the sale proceeds, you can choose to use various as the purchase date and enter the appropriate date of sale. There should be no cost basis in this entry. Be sure to select the correct holding period.

Long term is a holding period of more than one year and receives capital gain tax treatment (0%, 10%, 15%, 20% depending on your regular rate of tax)
Short term is a holding period of one year or less and receives ordinary gain tax treatment (your regular rate)

See the image below to use a different date acquired.

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ORKE1Author

The answer did not help because I did not sell anything , rights nor stock. Proceeds from the sale of rights will be added to the cost basis of the stock at some future date when i decide to sell it.

LyonZ

If the rights are not sold, they are not taxable, right?

tak_nev

I had the same issue for TCEHY entry that had the additional info in 1099 as proceeds from sale of rights. TurboTax was mandating to enter a cost basis as it was blank from the 1099 download for this entry. After talking to a TT advisor over phone they pointed out about the 1099 having info about this gain or loss not reported to the IRS. On a closer look it mentioned that it had to be reported on form 8949 and TT had automatically added this form with the necessary info from 1099. All I had to do was enter the cost basis as 0 and the error got cleared and it didn't change my tax due from what it was earlier.