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Reporting Form 1099-B cash in lieu of stock to the IRS in Lacerte

SOLVEDby Intuit45Updated almost 2 years ago

There's no specific input field for cash in lieu of stocks or fractional shares within Intuit Lacerte. Instead, you'll need to figure the gain or loss based on the 1099-B received and report the amounts in Lacerte as a regular disposition/sale for Form 8949 and Schedule D.

IRS Pub 550 on fractional shares

Per IRS Pub 550:

"Fractional shares. You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. However, with the approval of the shareholders, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Report this transaction on Form 8949. Enter your gain or loss, the difference between the cash you receive and the basis of the fractional shares sold, in column (h) of Schedule D (Form 1040) in Part I or Part II, whichever is appropriate."

Example from Pub 550

"You own one share of common stock that you bought on January 5, 2011, for $100. The corporation declared a common stock dividend of 5% on June 30, 2020. The fair market value of the stock at the time the stock dividend was declared was $200. You were paid $10 for the fractional-share stock dividend under a plan described in the discussion above. You figure your gain or loss as follows:

Fair market value of old stock$200.00
Fair market value of stock dividend (cash received)+ $10.00
Fair market value of old stock and stock dividend$210.00
Basis (cost) of old stock after the stock dividend (($200 / $210) * $100)$95.24
Basis (cost) of stock dividend (($10 / $210) * $100)+ 4.76
Cash received$10.00
Basis (cost) of stock dividend- $4.76

Because you had held the share of stock for more than 1 year at the time the stock dividend was declared, your gain on the stock dividend is a long-term capital gain."

Follow these steps to enter this example in Lacerte:

  1. Go to Screen 17, Dispositions.
  2. Locate the Dispositions (Schedule D, 4797, etc.) section.
  3. Enter the Description of property.
  4. Enter 1/5/2011 in Date acquired (negative date=various).
  5. Enter 6/30/2020 in Date sold (negative date=various).
  6. Enter the gain of $5 in Sales price.

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