Confusion on how to enter corrections to basis on uploaded Consolidated 1099 form

DougR
DougR Newcomer
in Filing my taxes

First time user of FreeTaxUSA. I've used TurboTax (downloaded/CD) since 1998.

On FreeTaxUSA I uploaded my Consolidated 1099 from Vanguard. What was uploaded agreed with the Consolidated 1099 form I received from Vanguard. All my mutual fund sales on that form are long-term and Type E (Form 8949), meaning the basis is not reported to the IRS. In 2025 I had four (4) sales on each of 4 dates, each with "Various" dates acquired. A total of four (4) securities were involved over the year. Even though the Consolidated 1099 shows the sales as Type E (not reported to IRS), it gives a basis value for each, though that basis value is incorrect. I have all my stock & mutual fund sales recorded in Quicken, so have records of each purchase and sale, and thus the actual basis for each sale.

Since the basis on the Consolidated 1099 form is incorrect, on the pages following the confirmation of the imported Consolidated 1099 data:
a) for the question "Do you have adjustments to this investment sale?", I checked YES
b) I checked the box for "The basis shown in Box 1e is incorrect"

and on the following screen I entered the correct total basis amount. There was no wash sales involved, so I checked NO for that.

When I CONTINUE past the "Your Investment and Savings Accounts" section, I get to the page titled "Attach Summary Statements for your Sales". This is where I find the instructions a bit confusing, and/or incomplete (but it may just be me).

It says:
"Please attach summary statements for:
VANGUARD MARKETING CORPORATION VANGUARD BROKERAGE: Long-term (Box E)"

  1. Can this simply be a self-generated table of all the mutual fund sales that are shown on the Consolidated 1099? Since I have all my stock & mutual fund purchases & sales recorded in Quicken, I can generate a report showing the needed information for each sale (account, security, shares, purchase date, sale date, Gross Proceeds, Cost Basis, and Realized Gain), including the actual, correct, basis.
  2. Is attaching such a report (PDF) sufficient for the summary statement, or do I also need to file a Form 8949? That is unclear to me.
  3. And if I need to attach form 8949, I don't see how to make that happen in FreeTaxUSA. Do I download the Form 8949 from the IRS website, fill it out, and then attach it in FreeTaxUSA? Or will FreeTaxUSA generate it?
  4. Or instead of importing the Consolidated 1099, is it better to enter each sale explicitly, via "+ Add Investment" / "Stock Sales"? And will that then cause FreeTaxUSA to generate a Form 8949?

I guess I'm used to TurboTax generating the Form 8949, based on my answers to their interview process.

Thanks,
Doug

Answers

  • JanaA
    JanaA image
    Hello DougR! FreeTaxUSA automatically generates Form 8949 with Box E checked based on the investment entries you've already made. You don't need to download a blank Form 8949 from the IRS website or fill one out manually. The software handles that for you.

    The "Attach Summary Statements" page is asking for a supporting detail document that goes along with the Form 8949. The IRS allows this under what they call "Exception 2" in the Form 8949 instructions, instead of listing every individual transaction on separate rows of Form 8949, you can attach a statement that contains the same information in a similar format. Your Quicken-generated report would work well for this, as long as it includes the following for each sale: description of the security, date acquired, date sold, gross proceeds, cost basis, any adjustment amount, and the gain or loss.

    You do not need to enter each sale individually using "+ Add Investment / Stock Sales" unless you prefer that approach. The import method you used, with the basis corrections you already entered, is the correct way to handle this. The summary statement attachment is simply the backup detail that supports the totals on Form 8949.

    To confirm everything looks right before you file, you can go to the Summary tab and click "View" next to your Form 1040 to see the generated Form 8949 and verify Box E is checked with your corrected basis figures.

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