MsTabbyKats Posted March 10, 2015 Report Share Posted March 10, 2015 Client works for Microsoft and exercised some options. This is on his 1099-B The rep at Fidelity told him NOT to use the figures on the 1099-B...but to use the supplemental information...or it would be duplicating income. Logically....it makes sense. However....I thought the 1099-B was supposed to reflect everything and not be tampered with. I don't want the client to get "a letter"....yet I don't want him to overpay. Anyone else ever "not use the 1099-B"? Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted March 10, 2015 Report Share Posted March 10, 2015 Change for this year is that the 1099-B basis will not reflect the income allocated to the taxpayer and shown on their W2 via code V. I have one (Whole Foods stock) wherein the supplemental form does include the code V basis and closely approximates what the 'real' basis should be. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted March 10, 2015 Report Share Posted March 10, 2015 Have one on my desk right now. Exercise price was $28.32. No basis amounts reported on the 1099-B. Well... The IRS likes it, because now they can send you a letter for income that is already in the W-2, for the stock sales with NO basis. Idiots. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 10, 2015 Report Share Posted March 10, 2015 I start with the 1099-B and make sure the proceeds match. Then, I turn to the supplemental information for basis information and other details. If covered, and SI doesn't match 1099-B, then I have to report adjustments. If uncovered, I stick with SI info. And, then I have to make sure I agree with stock option basis, that the SI really included the W-2 code V. If not, more adjustments. I think it got more complicated this year for preparers. 1 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted March 11, 2015 Report Share Posted March 11, 2015 You have to include the code for 'reported basis is wrong' and put in the wage basis as an adjustment. Don't just change the basis or you are looking at a cp2000. 2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 11, 2015 Report Share Posted March 11, 2015 Right, adjustments have two parts. In my software, I pick a code from drop-down menu for one box and then put the amount of the adjustment in the next box. Watch your input/read the input screens, look at how it appears on 8949 (is it what you expect?), and read the diagnostics. I sometimes have to change a number to a negative number in an adjustment. Quote Link to comment Share on other sites More sharing options...
Kea Posted March 11, 2015 Report Share Posted March 11, 2015 Also, it depends on whether the 1099 B uses Codes A or D for "covered" transactions. If they used B or E for non-covered, then they didn't send the basis to IRS. You don't have to use an adjustment code. Just report the correct basis regardless of what's on the 1099B. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 12, 2015 Report Share Posted March 12, 2015 Yep, adjustments if Covered. Just use the actual basis if uncovered. Quote Link to comment Share on other sites More sharing options...
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