Discussion:Yet Another Stock Option Question
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Inagpurwala (talk|edits) said: | 6 April 2006 |
| Client excerside & sold ISO in 2005. No entry in box 12, except 401k, but an entry in box 14 for $10,409
Detail for ISO trades: Granted 2/04/02 500 at $16.06, excersied/sold on 8/11/05 at $28.34 Granted 2/14/03 333 at $16.06, excersied/sold on 2/25/05 at $18.71 Granted 2/12/01 167 at $16.06, excerside/sold on 2/25/05 at $18.71 ProSeries calculated total reportable compensation for all three $7,464 W2 detail: SS Wages $76,912 401k $3,253 Which gives total of 80,165 Box 1 total $84,068 Which tells that $3,902 is related to ISO. Questions: 1) Why amounts are different (Proseries and Box 1 of W2) 2) What is $10,409 entry for in box14. Your help is greatly appreciated. Thanks in advance.Inagpurwala 22:19, 5 April 2006 (CDT) | |
| 6 April 2006 | |
| 7464 is correct. Schedule D should be a wash for each sale because excercised and sold same day - given net proceeds on 1099B. Box 14 should say what the 10K is all about. Is it possible it was an ESPP that was discounted? | |
| 6 April 2006 | |
| I am not really sure that the W-2 income income from the ISO's is $3,902. It seems to be $10,409. You can prove this figure by adding the 401(k) elective deferral of $3,253 to the box 1 wages of 84,068 and subtracting the SS wages of $76,912 from the result. Remember that ordinary income from the disqualifying disposition of qualfied options is not included in SS wages.
I agree that the income from the 3 ISO's totals to $7,465. There must be another ISO somewhere. | |
| 6 April 2006 | |
| I don't follow your analysis of the W-2. The difference between the strike price and the market price should have been reported as income in Box 1 and is also part of the SS wages. It doesn't necessarily appear anywhere else on the W-2. You don't say how many shares so I can't compute the amounts, but likely it's the amount in box 14. ISOs don't go in box 12, just restricted or non-statutory options (code V). His/her basis is the $16.06 per share plus whatever was added to the W-2, so the sales should essentially break even except for broker/transaction costs. In other words, he/she should have paid 16.06 for each share, and been credited with W-2 income of $12.28 for each 8/11 share, giving him a basis of $28.34, and so on. Unless you have other info, I'd just report what's on the W-2 and list the sales on sched D at no gain/noloss and not worry about it. | |
| 6 April 2006 | |
| Sorry, I didn't see the number of shares the first time. Yup,comes to $7465. Must have been another exercise/sale. | |
Inagpurwala (talk|edits) said: | 6 April 2006 |
| Thanks Solomon,Riley2,and Dhtax. That is what I thought that one or more trades are missing. But client keeps insisting on no other trades. Since there is no Sch D gain/loss and trade income is already reported on W2, tax wise thing seems OK.
Thaks again.Inagpurwala 12:07, 6 April 2006 (CDT) | |
