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Reporting Form 1099-B Box 1e (Cost or other basis) when it's not reported by the brokerage firm

Forum|Forum|5 years ago
January 30, 2021
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One of my Forms 1099-B, has the word "Missing" printed in box 1e (Cost or other basis). TurboTax requires an entry in this box 1e to proceed. You can't leave it blank, nor will it except accept alpha character to input "Missing" as it appears on the 1099-B.

Although, there's no amount in the box, do I just enter 0.00 to proceed to the next screen?

Also, the 1099-B was part of a corporate action (merger). While the basis is not reported (or missing), I know the basis. Is it best to just enter 0.00 in TurboTax 1099-B, then report the basis on Form 8949.

Or, can I report the known basis in TurboTax even though it's not report on the actual 1099-B from the brokerage firm? If I report the missing basis in TurboTax's 1099-B section, then it's not going to match the brokerage's info they submitted to the IRA. Will this mismatch cause an issue whey filing?

Best answer by ToddL99

Yes, report the "Cost or other basis" in Form 1099-B Box 1e, even though it's not reported by the brokerage firm (this is common).

Since you know the basis for the stock, enter it when you are entering the rest of the 1099-B information - in the interview menu for Stocks, Mutual Funds, Bonds and Other.

The IRS will be looking for that 1099-B in your return, to ensure you report the "Proceeds" from the sale. Adding the "cost or Other Basis" information will ensure you are only taxed on your gain. Adding missing cost basis information will not create a "mismatch" with the IRS record of the 1099-B.

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ToddL99Answer

Yes, report the "Cost or other basis" in Form 1099-B Box 1e, even though it's not reported by the brokerage firm (this is common).

Since you know the basis for the stock, enter it when you are entering the rest of the 1099-B information - in the interview menu for Stocks, Mutual Funds, Bonds and Other.

The IRS will be looking for that 1099-B in your return, to ensure you report the "Proceeds" from the sale. Adding the "cost or Other Basis" information will ensure you are only taxed on your gain. Adding missing cost basis information will not create a "mismatch" with the IRS record of the 1099-B.

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hwisungi

In my case, my broker (Fidelity) provided me with Form 1099B with box 1e (Cost or Other Bases) with a non-zero value, but with a letter "(e)" suffixed to the value.

When TurboTax imported this data from my broker, it is recorded with no value filled in the "Cost or Other Basis" in its Form 1099B, with (in the "Quick Entry Table" for Form 1099B in TurboTax (Premier):

1. "Basis Reported to IRS" set to "No",

2. "Reported on Form 1099B" set to "Yes"

However, my broker provided "Supplemental Information" with "Adjusted Cost or Other Basis" for the sales with a bigger value than what they had in their 1099B.

So, in this case,

A. should I put any value other than zero in TurboTax's 1099B form for this sale?

B. If so, which of the two values should I put?

b.1. the value in box 1e in broker-provided 1099B, OR

b.2 the value in "Adjusted Cost or Other Basis" box in broker-provided "Supplemental Information"

C. If I put zero or b.1 (i.e., non-adjusted cost basis) in TurboTax's 1099B, where should I correct (or adjust) the basis? It seems like I can do that through the "Quick EntryTable" for Form 1099B in TurboTax (Premier)? Is that the right place?

A

adamlewis

I finally figured it out by reading more closely the 1099-B that Fidelity provided.

There is a section named "Supplemental Stock Plan Lot Detail" and I noticed the lines in the first section of the 1099-B that were marked with a cost basis suffix of "(e)" were also shown differently in the Supplemental Stock Plan Lot Detail section.

They were marked as Grant Type: QSP.

QSP represents: Qualified ESPP Shares

Therefore, the (e) indicates QSP, which indicates ESPP shares disposed. Also, if you recall, the TurboTax software stated that ESPP sales would NOT be marked as Needs Review, which is actually incorrect. The existence of the "(e)" on Fidelity's 1099-B breaks the Turbo Tax import and zeros out the cost basis and acquisition date, which causes those lines to be marked Needs Review and then when you edit the row, the data is in an unacceptable state.

Conclusion: When customers ask about cost basis being unexpectedly zero upon 1099-B import, you should have them check their original tax form for any characters included as prefixes or suffixes by the brokerage that may have broken the import to Turbo Tax. In the case of Fidelity, they use an (e) in the cost basis cell value as a suffix to the dollar amount. Customers should review the Supplemental Stock Plan Lot Detail section of the original 1099-B to determine the Grant Type code and then set the appropriate sale type manually in the Turbo Tax software.

It would be great if TurboTax could repair this defect in their software.

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me271

my brokerage did not report the cost basis to the IRS. What do I need to do so my profit is accurate?

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RobertB4444

@me271 It depends - if the cost basis is not reported to the IRS but does appear on your 1099-B form then it will show up on your tax return just fine when you import your 1099-B into TurboTax. That is how you will report it to the IRS.

If the cost basis is not reported to the IRS AND is not reported on your 1099-B then you will have to manually enter the correct cost basis into your tax return just as @RaifH details above.

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hwisungi

No, it isn't for all entries. I have some of the cost basis in the "cost bases reported to IRS" section of the 1099B received from Fidelity, but with the cost suffixed with characters "(e)", and that is why I believe TurboTax did not accept the value and left as blank, and ask me to review again.

I learnt that I have to put the value Fidelity reported to IRS (which is in the form 1099B received from Fidelity, which is NOT adjusted) "as is" in the first page of the sales details in TurboTax, and click Next button until I meet the page where I can select options to input adjusted values for cost basis. Because Fidelity already has the values adjusted and provided in the "Supplemental Information", I could select "I already have all information...." instead of "guide me...". I then simply had to put the adjusted values Fidelity provided as "Supplemental Information".

Beware that if you use "Guide me..." option to input the adjusted cost bases, but do not complete to the end, or change later with the other option "I already have all information..." TurboTax messes up your data and won't allow input or change of some of the boxes. You will have to remove the sales from TurboTax and add it back yourself as a separate group. TurboTax doesn't allow clearing of the entry they messed up. They don't seem to be able to fix this bug for years.

I am using Desktop TurboTax Premier for Tax 2021.