Possible Bug When Calculating Cost Basis with Reinvested Dividends in TurboTax Premier 2008?

I was doing my taxes in TurboTax Premier 2008 (with all the updates) tonight, when I noticed something unusual. Ever since the IRS “helped” me find a bug in TurboTax a few years ago, I’ve been very cautious – double, triple checking my work.

What I noticed tonight is that TurboTax seems to change the number of shares behind the scenes in the Original Purchase Lots of the Capital Gains Worksheet.

Here’s an example. Let’s say you sell 1000 shares of Test.

Now, let’s say you enter the purchase information as such:

You enter the purchase transaction using the “price per share” method, entering 500 shares at 10 each. If you click continue, then view the Capital Gains Worksheet, you will see this:

Ok. That makes sense. But let’s say you go and enter your purchase information in a different way:

You enter the purchase transaction using the “total purchase price” method, entering 500 shares for a total of 5000. If you click continue, then view the Capital Gains Worksheet, you will see this:

Observe that the number of shares is now 1,000. Why is that the case?

You might say “Big deal! The Total Cost” is the same!”

Unfortunately, because the number of shares purchased is the same as the number of shares sold, any information you add about reinvested dividends will be ignore, leading to an incorrect cost basis – both in dollar amount, and in break down of Long Term vs Short Term.

Perhaps I’m mistaken – I’m just bleary eyed from doing too much lately. That said, I was able to repro this using a clean TurboTax 2008 return – twice. Could someone double check my work?