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ESPP 8949 Adjustment(g) shows 0 when display option is set to `cash only` #137

Closed shashankram closed 8 months ago

shashankram commented 8 months ago

When I switch the 8949 display option to cash only, the Adjustment(g) values are zero, thereby considering all the proceeds as gains. This does not seem correct?

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hickeng commented 8 months ago

This is correct for lots where the cash received is less than the alternate gain calculation. Note that the Gain (h) value remains the same between the two settings. The Gain for a lot is dictated by the formula in Form8937.

See my comment here for some additional explanation as to why.

shashankram commented 8 months ago

Thanks @hickeng. Does that mean I do not need to provide any adjustment for such lots? Or is there additional info I need to provide to my CPA when using the Cash only option?

hickeng commented 8 months ago

Give your CPA all of the generated Form8949 numbers, regardless of adjustment(ESPP) or basis(RSU) being zero.

If all of your lots have a zero basis and adjustment then you can just use the 1099 as-is without correction. It's unlikely to be the case given the way basis was spread, but could happen.

shashankram commented 7 months ago

All of my ESPP lots have a 0 adjustment with the cash only option, but some RSU slots have the basis generated.

hickeng commented 7 months ago

That's expected for ESPP. Once you factor in the 15% discount, none of the ESPP lots got close to a high enough basis (128.60) for the alternate gain calc to apply. The highest basis ESPP ever had (for my grant/purchase dates anyway) was 120.22 from 2019-08-31 purchase, and that was adjusted down to 103.64 by the 2021 dividend.

shashankram commented 7 months ago

Does that mean we do not need to provide any basis adjustments for the 1099-B provided by Etrade?

hickeng commented 7 months ago

Does that mean we do not need to provide any basis adjustments for the 1099-B provided by Etrade?

Correct, for the lots that don't have a non-zero basis, which is all the ESPPs.

For ESPP the complexity is the future basis factoring in the imputed ordinary income.