Form 8949 Worksheet – TurboTax Import Considerations


As a matter of operational convenience and to assist with the preparation of IRS Form 8949 (Sales and Other Dispositions of Capital Assets), IB prepares a Form 8949 worksheet in each of a PDF, CSV and TXF format on an annual basis. The TXF format is a data file specifically designed for import to Intuit’s TurboTax tax preparation software application.

In order to complete the Form 8948 in an IRS compliant manner, adjustments to the gain or loss of a particular transaction may be required in order to reconcile the totals on this form with the corresponding fields on Form 1099-B. When an adjustment is required, entry of a IRS specific code is also required in order to explain the adjustment. Example of codes are as follows:

W: The customer has a nondeductible loss from a wash sale. This applies where the transaction being reported is a wash sale

B: The basis reported on box 3 of Form 1099-B requires clarification.  Take, for example, a wash sale where the original security was purchased prior to January 1, 2011 (i.e., classified as "non-covered"), sold at a loss and the replacement purchased within 30 days but after January 1, 2011 (i.e., classified as "covered").  In this case, the basis reported on Form 1099-B for the "covered security" does not include the disallowed loss from the wash sale and an adjustment on the 8949 worksheet is required.

T: The type of gain or loss (short-term or long-term) shown in box 1c of Form 1099-B requires clarification. Take, for example, a wash sale not reported on the Form 1099-B because the original purchase involved a "non-covered" security and where the replacement security is later sold. The holding period for the original purchase must be included in that of the later transaction and any adjustment from short- to long-term reflected on the 8949 worksheet.

E: The transaction is reported on Form 1099-B and there are selling expenses or option premiums that are not reflected on the form or statement to either the proceeds or basis shown. (this applies to options purchased or sold prior to 2011.)

O: There is an adjustment that we have failed to identify.

Currently, TurboTax only supports adjustments associated with code “W” and transactions which are subject to an adjustment requiring a different code cannot be imported to TurboTax through the TXF file.

If your worksheet contains unsupported codes, you will be notified of this through an error message provided when attempting to download the TXF file through Account Management (i.e., “Your import file contains IRS required information, the import of which is not supported by TurboTax”). If this is the case, TurboTax offers an alternative method which allows one to enter summary numbers from the worksheets into the electronic version of Form 8949, file electronically and mail in a schedules of trades thereafter. Detailed instructions for this method are outlined below.

TurboTax software download does not support all of the possible adjustment codes on Form 8949 – Sales and Other Dispositions of Capital Assets. Please follow the following instruction to add your securities transactions to your Turbo Tax prepared return.

Step 1: Print your Form 8949 Worksheet from Account Management through the Reports and then Tax Forms menu options. Please review the worksheet for any errors or omissions and verify that it is correct.

Step 2: In TurboTax, open your return and select Personal and then select Personal Income menu options.

Step 3: Scroll down until you reach the Investment Income Section and select
Stock, Mutual Funds, Bonds, Other and go to Start.

Step 4: Select EasyGuide

Step 5: Scroll down to the Other section and select from the following:

For Form 8949 worksheet Parts 1 and 2 Box A: Attach a statement – Broker-reported sales with basis reported to IRS

For Form 8949 worksheet Parts 1 and 2 Box B: Attach a statement – Broker – reported sales – no cost reported to IRS

For Form 8949 worksheet Parts 1 and 2 Box C: Attach a statement –
Sales without a broker statement

Note: Transactions reported on Form 8949 worksheet by IB include option transactions which as of the 2012 tax year are not required to be reported by brokers to the IRS on Form 1099-B.

Step 6: Select Short- or Long-Term as follows:

For Form 8949 worksheet Part 1 Box A : Short–Term
For Form 8949 worksheet Part 1 Box B: Short–Term
For Form 8949 worksheet Part 1 Box C : Short–Term

For Form 8949 worksheet Part 1 Box A: Long-Term
For Form 8949 worksheet Part 2 Box B: Long-Term
For Form 8949 worksheet Part 3 Box C: Long-Term

Select Continue

Step 7: On the new window, change the Date Sold box to Various and enter the totals from the part of the Form 8949 worksheet you are working from in the net proceeds box and codes.

Step 8: Check the box titled “My statement includes adjustment codes as described in Form 8949 instructions".

Step 9: Enter the adjustment column total from the Form 8949 worksheet you are working from and adjustment code M

Select Continue, verify results and, if correct, then Continue.

To add another set of worksheet totals begin again at step 5. If your Form 8949
Worksheet has information in all six sections you will need to repeat this process 5 additional times.

When this is complete, select Done and if you have completed this section, done with investment sales.

Upon e-filing your return a Form 8453 will be created. This form must be printed an mailed to the IRS along with copies of your Form 8949 worksheets within 3 business days after you have received acknowledgment from TurboTax that the IRS has accepted your electronically filed tax return.