Why is the cost/basis on 1099-B, different from the line item detail 1099-B?

Forum|Forum|6 years ago
December 7, 2019
4 replies
22 views

Learning how to handle these 1099-B's, I received the detail transaction report that shows the cost or basis, however on the actual 1099-b the column 1e shows a lower amount of cost and basis. Why is that?

Example line 1 shows on the detail the totaling of $4520.49 as proceeds, with the cost of $1579.50; (gain $2940.99); (Do I do anything with the $661.50 ordinary?)

however on the 1099-B states $4520.49 as Cost and Basis as $918.00?

Why also they reporting $4550.40? is that the difference of proceeds and reporting the sale expense of $29.91? Why the Basis was $1579.50 down to $918?

ProSeries Basic

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Best answer by rbynaker

This is some sort of employee stock option. Per IRS instructions the 1099-B cost basis reported is the purchase/exercise price of the stock. The taxpayer's cost basis is then adjusted by the amount of the gain on exercise that's already been included as compensation in their W-2. So for calculating taxable gain, use the supplemental report (which includes the compensation piece of the basis.) In your example, gain would be $2,940.99.

My guess is that there was a sales commission of $29.91 which is reducing the gross sales proceeds down to the net sales proceeds reported on the 1099-B. This is correct too.

L

lauriem33

Level 5

You need to go darker when you cross out clients info. I can clearly read the name and social. Maybe remove this attachment.

IntuitCharlene

Community Manager

Thank you for bringing this to our attention. The attachment has been removed from this post to protect the privacy of the taxpayer due to this being a public forum. For additional information please see the terms of use: https://accountants-community.intuit.com/terms_of_use

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Accept as solution" and then just changing the Accept as solution to Mark as Best Answer, mine gets cutoff, so it is too long. I changed mine to the following and it fits. -->**Say "Thanks" by clicking the thumb icon in a post**Click "Mark as Best Answer " to mark the post that answers your question.

1

1stoptaxservice

Level 3

thank you

rbynakerAnswer

Level 13

This is some sort of employee stock option. Per IRS instructions the 1099-B cost basis reported is the purchase/exercise price of the stock. The taxpayer's cost basis is then adjusted by the amount of the gain on exercise that's already been included as compensation in their W-2. So for calculating taxable gain, use the supplemental report (which includes the compensation piece of the basis.) In your example, gain would be $2,940.99.

My guess is that there was a sales commission of $29.91 which is reducing the gross sales proceeds down to the net sales proceeds reported on the 1099-B. This is correct too.

O

onestop73Author

Level 4

Thank you, Appreciate the time and feedback to help out.

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