How Do I Enter Employer Stock Sales in TurboTax?

If you work for an employer that offers a Employee Stock Ownership Plan (ESOP) or Employee Stock Purchase Plan (ESPP), you can enter any stock sales transactions you made in these plans using TurboTax.

Important: You cannot import employer stock sale transactions from the Quicken program, from a Tax Exchange File (.txf) formatted file, or from any online financial web site services. You'll need to manually enter your stock sales information in the TurboTax program.

 

• How to enter employer stock sales in TurboTax Basic or TurboTax Deluxe
• How to enter employer stock sales in TurboTax Premier or TurboTax Home & Business
• How to enter an employer stock sale as ordinary income

Do the following:

1. Open your income tax return in the TurboTax program.
2. Select the Federal Taxes tab, then select Income.
3. In the Choose How to Enter Your Information screen, select the Specific Topics button.
4. In the Your Income screen, select the Start or Revisit button for  Investment Income.
5. In the Any Investment Sales? screen, select "Yes, I had one or more of the above in 2007," then select Continue.
6. In the There Is a Better Product for You screen, select the Continue Without Upgrading button.
7. Follow the on-screen instructions in the TurboTax Interview.

8. Select the Back button if you want to make any changes for this transaction, otherwise select Continue.
9. In the Investment Sales Summary screen, you'll see all of your stock sales that you've entered into the TurboTax program.

Do the following:

1. Open your income tax return in the TurboTax program:.
   • Select the Federal Taxes tab, then select Income (TurboTax Premier).
   • Select the Personal tab, then select Personal Income (TurboTax Home & Business)
2. Select the Select Specific Topics button.
3. Select Investment Income, then select the Start or Revisit button for "Stocks, Employer Stocks, Other."

4. In the Any Investment Sales? screen, select "Yes, I had one or more of the above in 2007," then select Continue.
5. In the Choose How to Enter This Sale screen, select the Step-by-Step Guidance button.
6. In the Choose the Type of Investment screen, select the option for "Employee stock purchase plan (ESPP)."

7. Follow the on-screen instructions in the TurboTax Interview.
8. When you finish entering the employer stock sale transaction, you can review your entries in the Your ESPP Sale Results screen.
   • Select the Back button if you want to make any changes for this transaction, otherwise select Continue.
9. In the Investment Sales Summary screen, you'll see all of your stock sales that you've entered into the TurboTax program.

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Typically, when you sell shares of employer stock, you're taxed at the generally lower capital gains rate instead of the often higher ordinary income rate. However, you need to be aware of the possibility that the gain or loss on the sale of your employer shares could be treated as ordinary income if:

• You bought the stock shares at a discount from the market price, or
• You owned the stock for one year or less, or
• You began buying the stock less than two years before you said you sold it.

If your shares are treated as ordinary income, look on your Form W-2. It should list an amount titled "ESPP Disqualifying Disposition" or "ESPP Qualifying Disposition" or something similar.

Add this amount on your Form W-2 to the cost of the shares to figure the total cost basis to enter for this sale.

If you don't see an ESPP-related entry on your Form W-2, contact your ESPP administrator, who will give you the information you need.

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