Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
NQSO 1099B, W2 and filing questions
Posted by: airtas, April 18, 2017 05:04PM
I was given 300 shares of NQSO stock at 17 share.

I sold the stock at 41.


My 1099 shows net proceeds of 4122 (which was the check IO received)

The Cost basis was 1717 on the 1099.

My w2 had 7224 (total with tax) added in as income.

Do I merely adjust the cost basis to be equal to the 4122?

Is it normal for a 1099 to be after tax?

Re: NQSO 1099B, W2 and filing questions
Posted by: Art, April 18, 2017 07:34PM
I am confused by your use of the word "given."

If you mean you exercised a NQSO and immediately turned around and sold it for a "profit" shown in W-2 box 12-V,
you do not have to report this unless you received a form 1099=B reporting the sale of the stock.

In that case the cost basis is the exercise price plus the Box 12 amount.


Re: NQSO 1099B, W2 and filing questions
Posted by: airtas, April 20, 2017 11:56AM
Art Wrote:
-------------------------------------------------------
> I am confused by your use of the word "given."
>
> If you mean you exercised a NQSO and immediately
> turned around and sold it for a "profit" shown in
> W-2 box 12-V,
> you do not have to report this unless you received
> a form 1099=B reporting the sale of the stock.
>
> In that case the cost basis is the exercise price
> plus the Box 12 amount.
>
>

Sorry, I was granted shares for our company going public.

If I follow what you told me exercise price is 17 right?

Won't I show a huge loss as my 1099 is only showing proceeeds around 4100?

The 1099 Cost basis is 17x101 shares (which were the ones I actually sold)

I think the problem is my 1099 proceeds are after tax.

Re: NQSO 1099B, W2 and filing questions
Posted by: kaneohe, April 20, 2017 09:27PM
Been a decade or more since I exercised one of these but my recollection is that the bargain element
(FMV - exercise) = (41 - 17) =24 x300 sh = 7200 was added to W2 which roughly agrees w/ your 7224.

For same day exercise typically the sale price was close to FMV so you might get a small gain/loss, typically less than a few hundred bucks. The basis would be the
41 x 300 sh = 12300 and the net proceeds would be the selling price x 300 sh less fees.......so I am confused by the cost basis and proceeds you reported. Perhaps your HR folks could explain?

Re: NQSO 1099B, W2 and filing questions
Posted by: airtas, April 21, 2017 08:37PM
They are pointing me towards a tax advisor lol.

Bottom line if my options were added into my w2 I should show a small loss (usually commission) in the stock section of tax reporting, right to prevent double tax?

I think my 1099b is messed up.

Re: NQSO 1099B, W2 and filing questions
Posted by: airtas, April 21, 2017 08:38PM
Art Wrote:
-------------------------------------------------------
> I am confused by your use of the word "given."
>
> If you mean you exercised a NQSO and immediately
> turned around and sold it for a "profit" shown in
> W-2 box 12-V,
> you do not have to report this unless you received
> a form 1099=B reporting the sale of the stock.
>
> In that case the cost basis is the exercise price
> plus the Box 12 amount.
>
>


So I would show a loss even though I made a profit?

Re: NQSO 1099B, W2 and filing questions
Posted by: Art, April 22, 2017 08:22PM
The profit was already added to your W-2 box 1 as taxable income, so you need only report the sale resulting in a small or no loss, but only if a 1099-B was issued.



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