Reply To: Employee stock options NQSO or ISO after splits

Home Fairmark Forum Taxation of Investments Employee stock options NQSO or ISO after splits Reply To: Employee stock options NQSO or ISO after splits

#53424
Kaye Thomas
Moderator

I don’t know if this is typical, but it’s not surprising. They should have checked box 5 on your Form 1099-B, or otherwise indicated this is a “noncovered security.” This would tell the IRS that the company isn’t reporting the basis information for the shares, and the IRS will expect you to come up with your own figure for basis. If their form shows zero basis without indicating the shares are “noncovered,” you can request a corrected Form 1099-B from the company. You wouldn’t be asking for a form showing the correct basis, but just for the “noncovered” indication.

However, even if you can’t get this, you can put your correct basis on the form with a proper code indicating it’s different from the one on Form 1099-B, and attach an explanation. IRS expects to see this happen on many returns, so it is unlikely to trigger an audit.