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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
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Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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Back on 08/2004 I purchased 38510 shares of a privately owned

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Back on 08/2004 I purchased 38510 shares of a privately owned Corporation for $10,000.00.
The Class A preferred Stock was sold on 03/23/10 for $66,384.00. In the Turbotax software on line 24 column H-1, I was asked for the cost basis of the stock. I divided 38510 shares into $10,000 and my answer was $.26 per share however Turbotax flagged this answer when I did a check of my return. Could you tell me why turbotax flagged my answer? Did I do the calculation incorrectly?

Arthur Rubin :

My recollection is that Turbotax wants the total basis of the lot, rather than the price per share. Hence you should report $10,000 for the basis, rather than $.26.

Arthur Rubin :

For a more complete answer, I'd need to know which version of Turbotax it is, and into which form you are entering the data.

JACUSTOMER-q2u14m2m- :

I tried to enter $10,000.00 as the basis however the turbotax Premier software still flagged this as an error.

JACUSTOMER-q2u14m2m- :

the screen looks like this:

JACUSTOMER-q2u14m2m- :

Capital Gain wks (38610 shares 3tera)

JACUSTOMER-q2u14m2m- :

Cost Basis Lookup Worksheet:

JACUSTOMER-q2u14m2m- :

Line 24 column (h)-1 is estimated Line 24,column (h) 10,000.00

JACUSTOMER-q2u14m2m- :

Part IV lookup Detail Results

JACUSTOMER-q2u14m2m- :

24 Detail Results of cost basis lookup

JACUSTOMER-q2u14m2m- :

(a) date(b)

JACUSTOMER-q2u14m2m- :

p

JACUSTOMER-q2u14m2m- :

d

JACUSTOMER-q2u14m2m- :

(c) symbol (d) cusip (e) short-term number of shares (f) short-term cost (g) Long-term number of shares (h) Long-term cost

Arthur Rubin :

It looks as if you attempted to use Gainskeeper on a private corp. If you were to enter the actual cost basis or cost-per-share on the worksheet, that might work. If all else fails, you can override a line of Form 1040 Schedule D Line 8..

Arthur Rubin :

(And California form 540 Schedule D; as an override on the Federal form may not propagate to the state form.)

Arthur Rubin :

(By "the worksheet", I mean the simiplied data entry sheet, where you specifiy the cost-per-share or total cost.) I have "Home and Business", and I can't find a form or worksheet exactly like yours.)

JACUSTOMER-q2u14m2m- :


A friend suggested putting zero's on everything and starting from scratch. Do you recommend I start from scratch?

Arthur Rubin :

It might be sufficient to delete that asset and start from scratch re-entering it, before overriding lines on the actual tax form.

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