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

[onestop73]

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?

[lauriem33]

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

[IntuitCharlene]

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

[1stoptaxservice]

thank you

[rbynaker · Accepted solution]

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.

[onestop73]

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