Discussion:Stock options- again
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| 16 March 2006 | |
| I tried to find my other discussion on Nonstatutory stock options but could not. I've got to figure this out because I've got several this year. I think this is simply, Box 12 of W-2 shows "V" and $75,000. Form 1099-B shows the sale for $102,459. Am I making this too simplistic reporting the $102,k selling price with a basis of $75,000? This is all the information I have, nothing from the employer, nothing showing grant date, exercise date, number of shares, nothing. Do I need more information in order to report this correctly? | |
| 16 March 2006 | |
| The $75,000 would be part of basis. The other part of the puzzle is the cost of the option. | |
Chris2lane (talk|edits) said: | 16 March 2006 |
| The $75,000 is for a nonqualified stock option. In most cases, that figure is included in the individual's W-2. Your client's employer should supply you with a detail of grants and exercises. The client's cost basis will be the option price plus the amount of income reported on W-2 from the exercise of the stock. | |
| 17 March 2006 | |
| Thank you, thank you! Please forgive my insistant ignorance, but here are the specifics (one part of the total sale). Grant date is 9/19/02; grant price 23.20 for 303 shares exercised = $7,029.60 total cost. Exercised on 2/4/05 (also date of sale)when FMV = $11,244.33. Amount included in W-2 - $4,217.50. 1099B = $11,250, fees paid = $40.52. Would anything have been reported in 2002? On Schedule D, report SP = 11,250 and basis = ???? If an amount in included on W-2 with code "V" does that always mean that there will also be a sale to report on Schedule D in the same year? That is, can income be included on W-2 when no exercise (and therefore sale) takes place? | |
| 17 March 2006 | |
| I think I have covered this issue before. No income is recognized on the grant date unless this specific option is traded on an exchange (this will never happen).
The presence of a "v" indicates an exercise, not necessarily a sale. In this case, you will show a $38 loss on Sch. D. | |
| 17 March 2006 | |
| Thank you for your responses and expertise. I have read everything possible and, though I can arrive at the loss you show, I would never have figured it that way. As well, I still have no idea how you would report a sale in a subsequent year without the W-2 income reported on the exercise in a previous year. I guess that's why you have to request info from the employer. Now, I'm working on exercise of a stock appreciation right and can't find anything on it. I'll keep trying. Thank you again. | |
| 27 February 2008 | |
| I think this is a tempest in a teapot but anyway: Client's return with NQSO, I'm using TaxAct which is not very fancy. All that was reported on the 1099-B was the date Acquired and Sales Price. W-2 takes care of the important stuff (V).
I calcuated the cost basis myself (as above) and just entered that in. It's right because all I end up with is a small loss equal to the commissions. Bottom line is that I am not breaking out on the Scd D how I arrived at the cost basis. Anyone think this will be a problem? I would imagine the whole reason to file the Scd. D is to account for the 1099 B. Thanks for your help. | |
Death&Taxes (talk|edits) said: | 27 February 2008 |
| You got it. Last year when KRI was about to be bought out, they awarded many employees an option to purchase 100 shares, which were sold by E Trade which handled their account for cashless options. After I did two or three, I realized the loss was always going to be $20 because this was the E Trade fee. The numbers would be different because A cashed on 6/5/07 and B, who was on assignment, waited until 6/12/07 but the loss was always $20. | |
| 27 February 2008 | |
| Thanks D&T: I've seen some returns done in TurboTax and they show a gain on the sale on Scd.D.column f (which is the taxable compensation part), then on the next line they subtract "Less gain already included in compensation" and subtract the same figure out. Zero gain/small loss. I guess this is theorectically more clear, but seems the service knows about taxable comp. since they have W-2 info. I figured you folks had that same scheme in ProSeries or LaCerte.
Wouldn't the key be that the 1099-B match? As I say, I'm not breaking out how I arrived at cost basis, but I'm sure my cost basis and sales price are correct & reported, which is the key. | |
Death&Taxes (talk|edits) said: | 27 February 2008 |
| They are using an Options Worksheet, which Proseries now incorporates....another dumbing down of the tax preparation. Like you, I know what the answer should be but I chafe going through two worksheets to get there. | |
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