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Step 6. Stock: Tax return (Apr 28, 2018. Needs updating) Questions or comments to: firstname.lastname@example.org
This is the last step in our step-by-step Stock Recovery process to find it, protect it, and help you avoid double taxation. If you haven't gone through the previous steps, start here: Employee Stock
Member advice on stock issues for US tax return
Amended return. You can file Form 1040X "...within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later." IRS link [When you launch TurboTax, it asks if you want to file an amended return.]
You could pay taxes twice on the same income. At the time you acquired employee stock, you paid income tax on the company contribution. If you sell stock, the broker will use the cost basis in their records (which should not be "unknown" -- i.e. $0) to report your apparent profit to the IRS. Go to Employee Stock
If an entry on your tax return doesn't match what a broker, administrator, or transfer agent reported to the IRS as shown in your 1099-B, you can enter the correct data and include an explanatory note in your return -- using your tax-preparation software or via your tax preparer. Eventually, the IRS will mail you a computer-generated notice about the discrepancy between your tax return and the broker reports. You then follow the instructions in the notice to reply with a copy of your supporting data. If you have already filed before discovering this issue, you can file an amended return via your tax software or preparer.
You can do all of this with tax-preparation software -- including downloading the 1099-B information from your broker's website. (See TurboTax Import Partner list.)
TurboTax: Using TurboTax for ESPP shares -- step-by-step with screenshots. Now v02 with Capital Gain Worksheet and Form 8949.
If you do not have employee purchase records -- or did not input your lot-and-cost information into your broker's system -- for a particular time period before 3/1/2002, you can use the current version of the HPAA spreadsheet to help estimate the average cost basis for the various spinoff shares over that period. Fastest if you start at Employee Stock and work through the steps. (Note that current spreadsheet is dated April 7 -- version 14 since 2004.)
When you don't know dates, enter a single lot with "various" as the date. Brokers do that on their 1099-B reports to the IRS -- and TurboTax will let you enter "various."
Be sure to save the documents you used -- plus, for future reference, a copy of the HPE "Dear Shareholder" letter (which was not actually sent to shareholders.)
Be sure to save the spreadsheets you have modified -- under a different filename -- and keep them for future reference when you sell shares, etc.
If you elect to hire professional help, the IRS explains the different types of tax professional. You can search the online IRS Federal Tax Return Preparer Directory by geography and qualifications -- or by name to verify credentials: Directory of Federal Tax Return Preparers.
HP Share Ownership Program Tax Reporting provides helpful information collected by HPAA member Alan Silverstein and posted on his personal website: (Revised December 11, 2013.)
Official IRS website, which is well done and has a very good search box: https://www.irs.gov
Official TurboTax help site: https://ttlc.intuit.com -- which you can search even if you don't use TurboTax or don't want to register your copy.
See also our main page on general stock issues: https://www.hpalumni.org/stock and our page on Potential Micro Focus "Seattle SpinCo" 2017 US tax liability.
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