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7. Stock: Tax return (Feb 6, 2023. Needs more updating)
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This page is the last step of our Stock Recovery Process. If you haven't gone through the previous steps to determine which HP-related stocks you should have, start here: Employee Stock
HPAA spreadsheets. The cost basis treatment for the 2017 Micro Focus spinoff and merger used in the HPAA Cost Basis spreadsheets is based on a legal opinion provided to HPE by outside tax counsel. However, some brokers and administrators interpreted the transaction differently -- or did not report, or reported incorrectly -- to the IRS. The wide variation in reporting of the 2017 Micro Focus spinoff and merger affects cost basis calculations for all HP-related stock acquired before the HP/HPE split of 2015-10-21. As a result, neither the 2019 Micro Focus "Return of Value" transaction nor the 2021 sale of Perspecta can be factored into the HPAA cost basis spreadsheets.
Members report that brokerages, plan administrators, and transfer agents vary (sometimes dramatically) in how (or if) they make gain/loss and cost basis calculations and in what (if anything) they report to the IRS. As of Mar 2023, no member has reported -- privately or on the HPAA forums -- that their return has been questioned by the IRS due to how they reported the many extremely complex HP-related stock transactions.
Member advice on stock issues for U.S. 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 a tax-prep app, 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 you don't have good records -- or did not input your lot-and-cost information into your broker's system -- you can use our spreadsheet to estimate your cost basis for each HP-related stock for any span of HP employment from 7/1/1959 through the 11/1/2000 plan changeover. hpalumni.org/StockSpread
Fastest if you start at Employee Stock and work through the steps. (current spreadsheet is dated April 7 -- version 14 since 2004.)
You can do all of this with tax software -- including downloading the 1099-B information from your broker's website. (For example, 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.
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 tax-prep apps 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.)
Articles on employee stock purchase tax issues recommended by members: Sale of ESPP shares TurboTax article on ESPP
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 U.S. tax liability.
If formerly a regular, direct U.S. employee of HP or HPE -- or are in the process of leaving -- join the HP Alumni Association. No charge, thanks to HPAA's Supporting Members.
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