Question

TurboTax Issue on "Sales Price is not between the prescribed upper and lower limits"

Forum|Forum|5 years ago
February 7, 2021
8 replies
0 views

Hello,

I sell/write options that I collect premiums for, but TurboTax keeps generating an error message asking to correct the negative number. I double checked the TD Ameritrade statement, and indeed, the number is correct. Please advise.

TurboTax Home & Biz Windows

ColeenD3

If you imported your options transactions from brokers and you got an error stating that the values are not between prescribed limits, then that means there is a negative number being reported by the broker. The IRS will reject the return if it gets that far.

TT is flagging the error and not allowing it to be filed. Here is an answer that may give some guidance:

There has been a change by the IRS starting with the 2020 tax returns that will reject any return filed with a negative number reported in the proceeds or cost basis fields for Schedule D. TurboTax is flagging these situations ahead of time before the return is filed in order to prevent the IRS rejection. Some brokers are still using the old convention for reporting negative values and have not updated their reports to match the IRS.

The error message reported by TurboTax is telling you that the number entered cannot be negative.

Gains from expired options are reported by entering the gain amount in the proceeds column and no amount in the cost basis column. The end result here would be positive.

Losses from expired options are reported by entering the loss amount in the cost basis column and no amount in the proceeds column. The end result here would be negative.

No negative numbers should be entered in either the cost basis or proceeds fields.

If negative numbers have been imported through your brokerage statement, you will need to edit the entries to make the correction.

fanfare

Employee

Please be aware that you can aggregate covered transactions without adjustments on Schedule D Line 1a.

or Line 8a.

Form 8949 is not required and no mailing is necessary.

There is no reason to key in or import those transactions.

Option writes that expire are covered transactions.

H

hoser1234

The error is a TurboTax import error. TT is importing the "Gain or Loss" from TD Ameritrade into the Sales Price field in TT and therefore throwing an error whenever the gain/loss was a loss. Fix the import or scrap your 1099-B worksheets. It has nothing to do with TD Ameritrade reporting.

J

Jimmy W

CollenD3

Other forums are saying that this is a Turbo Tax error that has occurred in previously years. Can you share where you saw “ Starting from 2020, IRS will reject (no longer allow) negative proceeds....“. My situation is I first sold naked puts and bought it back later for a loss (paid more than what I initial sold it for). TD Ameritrade is showing a zero cost basis and a negative proceeds. No problem for previous years. Thanks much if you could elaborate

J

Jimmy W

CollenD3

Other forums are saying that this is a Turbo Tax error that has occurred in previously years. Can you share where you saw “ Starting from 2020, IRS will reject (no longer allow) negative proceeds....“. My situation is I first sold naked puts and bought it back later for a loss (paid more than what I initial sold it for). TD Ameritrade is showing a zero cost basis and a negative proceeds on their 1099-B. No problem for previous years. Thanks much if you could elaborate. According to IRS, what is on the tax return needs to match what is on the 1098-B which was sent to IRS. 1099-B is clearing now the negative numbers and brokers are saying they are not correcting them because they were correct.

best regards,

J

Jimmy W

Other forums are saying that this is a Turbo Tax error that has occurred in previously years. Can you share where you saw “ Starting from 2020, IRS will reject (no longer allow) negative proceeds....“. My situation is I first sold naked puts and bought it back later for a loss (paid more than what I initial sold it for). TD Ameritrade is showing a zero cost basis and a negative proceeds. No problem for previous years. The IRS instructions say that what is on the return needs to match what has been reported by the brokers to the IRS. Most brokers if not all are still showing negative proceeds and claim that they are correct. Thanks much if you could elaborate

J

JohnyCPA

I just spoke to someone at Intuit who stated that they are very familiar with this issue (ie TT not allowing negative values in "Proceeds" and that they will be issuing a patch "in a few days". I believe they had this same issue last year and also applied a patch. I checked my TT return last year and confirmed that negative values were allowed in this field.

J

Jimmy W

Ladies and gentlemen:

my broker told me this morning that TT has fixed the problem. I went to TT and confirmed that it is indeed fixed.

good day everyone. Let’s go Trump!
🙂

J

Jimmy W

TT is now allowing negative values proceeds. However we got a new and bigger problem. I filed the return yesterday and got a rejection notice. The error message from IRS through TT is “several amounts on Schedule D are negative which is not allowed....”. What should we do now? Brokers insist that negative values are allowed. TT made a patch to fix it. Now IRS rejects it.

L

linaj20201

The issue has been submitted and is currently under investigation. Please click on the following link and sign up for an email notification when it's fixed.

1099-B negative

A Form 1099-B is issued to report the proceeds from your stocks and bonds transactions. The transactions will generate either a long term or short term capital gain or loss depends on how long the stocks are being held. The amount will be reported on line 7 of your Form 1040 along with a Schedule D and Form 8949.

T

tdan19

Is this still relevant for 2021 taxes? I didn't receive an error, but I did get prompted for a review. I didn't change anything this year and turbo tax allowed me to continue. I just want to make sure my return won't get rejected if I have a negative number in the proceeds or cost basis this year.

J

JulieS

Yes, this is still relevant for the 2021 tax year. The IRS has not changed the instructions for reporting options, so you are likely to be blocked from e-filing your tax return if you enter a negative number for proceeds.

The IRS Schedule D instructions describe how to report options sales.

As @ColleenD3 paraphrased, "The take away is that gains from expired options are reported with the gain amount in the proceeds column and no amount in the cost basis column, while losses from expired options are reported with the loss amount in the cost basis column and no amount in the proceeds column."

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A

Anonymous

@JulieS

Is TT going to fix it soon? IRS does allow negative value. As stated in the IRS 1099-B Page 8 (https://www.irs.gov/pub/irs-pdf/i1099b.pdf) :

Box 1d. Proceeds
Enter the gross cash proceeds from all dispositions (including short sales) of securities, commodities, options, securities futures contracts, or forward contracts. Show a loss, such as one from a closing transaction on a written option or forward contract, as a negative amount by enclosing it in parentheses.