AMT and Equity Compensation
Alternative minimum tax, nonqualified stock options, incentive stock options and other forms of equity compensation.
Installment Sales
Posted by: SteveC, March 2, 2015 02:08AM
I bought (and read) the book "Consider your Options" and am still having trouble figuring out how to handle my situation. I had ISOs in a company that was sold to another company in 2013. My ISOs vested the day the company sold and my options went through a same day sale. Most of the ISO proceeds were paid in 2013, but some funds were held back in several escrows to cover certain contingencies. This year my W2 shows income, and code V details in section 12, for payments from those escrow accounts. Should I have treated this as an installment sale for 2013? TurboTax will not let me enter it as an installment sale because I didn't have any capital gains or losses from the sale (proceeds and basis are the same?). Would my 2014 schedule D and 8949 just show a sale from 2013 with proceeds and basis being the same? The escrow payments were added to my 2014 taxable compensation income and federal and state taxes were withheld.

Thanks, and thanks for a great book!

Re: Installment Sales
Posted by: triad, March 5, 2015 08:59PM
Are you sure these are ISOs? V in box 12 is for NSOs.

Re: Installment Sales
Posted by: SteveC, March 6, 2015 01:54AM
These were definitely ISOs and because of the buyout there was a same day sale resulting in a disqualifying disposition.

Re: Installment Sales
Posted by: SteveC, March 7, 2015 01:33AM
I might have been premature in my last response. A lawyer is looking into it, but someone now believes the ISOs were converted into NSOs during the acquisition. If this is true then my general question still stands: How should the holdback funds released in 2014 (and showing up as code V in my W2) be represented in my tax return? I have read that all box 12 V need to show up in Schedule D to keep the IRS happy.


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