TurboTax 2020 refuses to correct cost basis for ESPP

Same problem here.  Worked fine last year.  This year I get "0" for adjusted cost basis.  Sent "Feedback" through the program, and have received nothing back.  Will likely move on to a competitor soon and return it to COSTCO if it's not remedied soon.

Hi, 

Before reading this reply i wanted to state, i am not a CPA, a tax professional, I am just a TT user for many years. Do what you want with this info as it was helpful for me. It might not be helpful for all situations. I am using the PC disc version of TT Premier that i bought from Amazon. I am not sure if the following is the same for other versions. I tried my best to map out the steps i took. Thank you...

I was struggling with this same issue around adjusted cost basis for days. I read several places on TT forums, Reddit and others about this change from previous years, where it was just a form field where you could denote the adjusted cost basis and go. Easy in past but things have seemed to change this year. I finally broke down and called customer support, after connecting with the first rep, they quickly moved me to another CPA rep that was more "informed" with this process and in my case RSU (similar to the ESPP flow here that people are talking about). They stated that they had just helped someone with this same issue the prior day.

In previous years, that adjusted cost basis field allowed me to do the adjustments that were reported from my E*trade account statement but this year you need to tackle the entry of each transaction in a more lengthy process of reporting it seems.

For each of my transactions that are noted on my cost basis summary sheet, i had to do the following (this also assumes you might have imported or entered in each of the items before or along the way):

Note: I have replaced X throughout as the filler for each of your items that you might have. Also when i did the import from E*trade, TT was thinking that all of these imported transactions were not taxed, in turn, lowering my Federal Refund value at the top of the TT app screen. 😞

1. Edit one of the line items from the table to get to the screen that has a heading of "Tell us about your X", Sale #X of X. This screen has the Box 1a - B 1e inputs, sale category etc.

If you had entered the values or imported the values like I did, you will see all of these filled out except the Box 1e cost basis. Mine filed was highlighted in a red border requiring me to fill in a value before continuing. 

2. Enter your Cost basis here if not already filled in.

3. Verify the Sale Category is correct. 

4. Click Continue Blue button

5. On this new screen that has a title of something like "Any of these less common items on your X?", you will see more input boxes like Box 1f through Box 2 (checkbox).  In past years this was the screen where there was a dedicated "Adjusted Cost Basis" (verified by opening up TT 2019 to see it right there.)

6. In my case my Box 14 was filled in from my import and the correct State field was selected.

7. Clicked the "Done" Button to continue.

8. Next screen with title of "Was this sale of employee stock?".  First options for Yes, this is stock and No, this is not. 

9. I selected Yes, which then shows another question about remembering for future line items if you had more than 1. 

10. I selected Yes, since i had a few i needed to adjust from my main table of entries that i imported from E*Trade.

11. Then clicked "Continue" button

12. Next screen title is "What type of employee stock is this?" options for ESPP, NQSO, ISO, RS, RUS and none. Each of these seems to have a different flow after this point. Below is for RSU, but i assume the data that is required on the next screens is data you can get from your transactions.

13. I selected RUS, but you might go down the ESPP option if that is applicable to you. You can verify the type in your stocks program. E*Trade has a good way to view the transactions and each one's values (which we will use in a moment). 

14. Click "Continue" button.

15. Next screen title "Identify the Employer", select list of employers from your W2 entries. Also a filed to select who the stock belongs to.

16. Make your proper selections for this entry and click the "Continue" button

17. New screen title "Enter Your Sale Information" with Date Sold and Number of Shared sold. For me this was already filled in from E*Trade

18. Verify and click the "Continue" button.

19. New screen title "Total Proceeds Summary"

20. I reviewed and clicked the "Continue" button again.

21. New screen title "How Were You Awarded the Units You Sold?" with two options, From one grant lot, or From different lots. 

22. I selected "From one grant lot" and clicked the "Continue" button again.

23. New screen title "Enter Vesting (or Release) Information".  This screen has inputs for Total  Shares Vested/Released, Shares Withheld, Date Vested/Released, Market Price, Price you Paid, Purchase Commissions.

This was the part where it was not spelled out for me on the Stock Plan Transactions Supplement sheet that i normally use from E*Trade since only some of this data is on there. I had to go into E*Trade and pull up each of the individual release pdf document transactions to get the full details to enter in the values noted above and on this screen.  This is then when my cost basis was now adjusting to the correct amount and was now reflected in the Refund dollar amount at the top of the TT app screen. In my case removing the fact that i was not being double taxed like when i first did the import from E*trade and moving the number back into the correct direction. 

After i entered my values, i clicked the "Continue" button.

24. New screen title "Your X Sale Results". This page seems to be a summary of the transection. I clicked the "Continue" button.

25. new screen title "Select any less common adjustments that apply".  None were applicable to me so i proceeded to click the "Continue" button.

This in turn, brings you all the way back to the table of all of my entries. I then continued through each of my entries and repeated based on the type. 

Next i pulled up the "Show Relevant Form" by clicking the bottom left arrow button / icon. On this form i was seeing a title of  "Form 1099-B Worksheet", i scrolled down to the "Sales Results for Form 8949" and saw that those values are now show here with Adj code(s) and values. This part is where i asked the CPA on the phone "why this was different from previous years in the fact that the Adjustment Amount was not showing the Adjust Cost Basis". He said this (which i am still not 100% convinced on), "that the way that the form is setup this year could be different from past years. TT guarantees the data will be correct and will pay for any adjustments that are wrong".... not super assuring in my option... But i feel like the process noted above where you clearly document each of the entries and the data points for them is "correct". I think this new more lengthy process maps out the full transactions to TT vs just a blank entry in years past with one entry form.

Maybe this will not be solid enough of an answer/be a solid solution for some, maybe it will help some get a little closer to filing your taxes like me (as this is the last part that i had to do after waiting until mid Feb to have E*trade release the 1099-B stuff.), and without a doubt with most tax stuff, it might confuse or drive some more away from where they thought they should be. Again take the info above as you may, don't hold me to this, I normally would never post something like this but felt there was some resolution for me that it might help someone else out there. 

Best of luck and have a great day!

FOLLOW UP:

I am still not convinced with the above after reviewing my forms that TT outputs. I may have to consult with an actual CPA this year since this seems to be a real issue in TT. 

I paid for step by  step entry, not correcting your programing. Please mail my money back. H& R Block never had a problem. Do you need my address again?

I have numerous pages of ESPP sales and I seem to have to mark them all manually “.... from an ESPP” but still says I have to paper file and cannot efile. Don’t recall this issue in 2019. TT please fix. My AGI is lower too! Good for the stimulus. I want to file!!! 

I'm seeing the same bug, thanks for reporting it. I hope we get a reply soon. 

I'll include a few more details about the steps I followed and other issues I saw in the ESPP flow:

1. I originally tried to skip entering the Date Acquired, Cost Basis and Type of gain/loss in the beginning, since I knew I'd be choosing ESPP and it would get updated. 

2. I continued on through the flow and choose the ESPP option (which is hard to find every year BTW and it always seems to be slightly different)

3. I went through end entered all the ESPP info and thought it was working (I didn't notice until the last of my ESPP entries that it wasn't updating the cost basis until much later).

4. It said I was still missing info, so I went ahead and started adding Date Acquired, Cost Basis and Type of gain/loss to each of the entries (this is probably supposed to be entered automatically by the ESPP wizard but wasn't). 

5. I went back through the ESPP wizard each time I opened each entry to add Date Acquired, Cost Basis and Type of gain/loss, and I noticed that my ESPP info (Date granted, Date exercised, etc...) wasn't saved. Instead, it was auto-populating the whatever set of ESPP info I entered previously (I thought this was a feature at first, since it was nice when I chose sales that happened at the same time, I only had to enter it once). However, when going through again, I saw that it hadn't saved that info at all, but was always just showing me the info I had entered on the previous entry.

6. After updating most of the ESPP entries this way a 2nd time, I realized that it was telling me that my cost basis was $0 and something was not right.

That's when I found this thread...

Anyway, hope the details I added help you track down the bug and get it fixed. The ESPP wizard is the only reason I buy the Premium version of TurboTax every year. I shudder to think about how long it would take to do ESPP sales on paper.  Please TurboTax fix this quickly so we can all get our taxes finished. Thanks!

Absolutely - this is a TurboTax error.  Here's what I found (sorry if too much info):

TurboTax is 'broken'. For the 1st time, I find that it is incorrectly calculating my income. In particular, the Capital Gains from Schedule D are being overstated because the cost basis for my ESPP sales is not picking up the 'adjusted cost basis'.

My ESPP sales are all short term covered (Box A).  When entering each of these sales, I entered the Box 1e cost basis as reported on my 1099-B, and then after reporting this as an ESPP sale, I made the appropriate cost basis adjustment (e.g. adding back the value from the employee discount). All calculations/details I could see through the entry process seemed to indicate that the cost basis was being adjusted correctly; the short term gains (losses) were consistent with the adjusted cost basis.  Part VII of the Employee Stock Worksheet (29 e. & 29 f.) reflects the correct adjusted cost basis & gain (loss).  However, the Cap Gain/Loss Adjustments Worksheet does NOT reflect the adjusted cost.  As a result, the Cost basis in Schedule D (Part I, 1b (e)) does NOT reflect the adjusted cost.

Bottom line is Turbo Tax is broke and if I don't make a manual adjustment, my calculated taxes will be too high.  And while I may be able to make manual adjustments in the 'Forms' section of TurboTax, I of course run the risk of creating another unknown error in TurboTax.

I'm hoping TurboTax sees this and fixes the bug!

Update on my part.  I've no clue if they fixed it.  I did as others have suggested and entered a different account for each ESPP transition. ( the work around probably stated different brokerage but I found it worked under one brokerage and different account designations ).  After entering my transactions the corrected cost basis totals were very close to my W2 value reported so I called it good.  Intuit / TurboTax has been absolute crap in handling this.  They owe everyone purchasing this a refund of the price dif between the NON-ESPP versions and this up sell.  It is just a stupid software bug.  They took my data and were to have emailed me when the defect was fixed.  Never got an email.

Same problem here. I'm being TT is taxing me twice, as the income is on my W-2. This really sucks. In past years TT had a question "Is this reported on your W-2?", now it doesn't ask that. Now that I have to be a tax expert to use TT, what's the point? What else am I missing? It's the end of March already and they should have fixed this by now. I have no faith in this program. It may be costing me a lot of money.

On Schedule D, the cost basis on Line 9 is greatly overstated and should be corrected; however, I have not found any way to correct this figure.  It way overstates the correct figure.  How do I correct his?

I have the exact same issue! I'm dealing with the better Business bureau to try to get a refund for guarantees and promises they slap all over their website that mean nothing TurboTax is full of lies. The lie to you every chance they get and make promises they won't keep. Good luck.