employee stock option

[bstaxes]

Hoping for verification. W-2 has box 12 with an amount and code V. It is included in the wages therefore it does not have to show on a sch d or any other place on the return. Boy do I feel brain dead.

[kcjenkins]

V is exercise of none-stat employee stock option, so it just becomes part of his basis in the stock. Not on the return unless he then sold the stock.

[bstaxes]

It is a sale. I have a 'confirmation of exercise' from the company stating same-day sale for the value of box 12, also have 'statement of taxable income' for the same value labeled total w-2 income. That value is included in box 1,3,5 on his w-2 as per the v code. What I don't have is a 1099B or anything that would be sent to the irs as a sale. If the value is already included in the wages then it not reported any where, or should it be reported on sch d cost=selling price with no loss or gain.

[TAXBILLY]

It is a sale. I have a 'confirmation of exercise' from the company stating same-day sale for the value of box 12, also have 'statement of taxable income' for the same value labeled total w-2 income. That value is included in box 1,3,5 on his w-2 as per the v code. What I don't have is a 1099B or anything that would be sent to the irs as a sale. If the value is already included in the wages then it not reported any where, or should it be reported on sch d cost=selling price with no loss or gain.

I'm confused. First you say it's a sale and then you say there is no 1099-B.

Confirmation of exercise does not mean "sale". It simply means just that. If you don't have a 1099-B then the client still has the stock. You need to find that out from the client.

If and when he does sell the stock the client will get a 1099-B and his cost will be this code v amount.

taxbilly

[bstaxes]

Thanks Taxbilly. I was confused too. Company paper work states sale but no 1099B. I will contact client to see if it was a sale.

[Lion EA]

When and if he has a sale, his cost basis is the V amount on which he's paying taxes as already in his ordinary income + any amount he paid out of pocket or had deducted from his proceeds to purchase the stock. If a same-day sale, there should be no gain and probably a small loss equal to any commissions/fees he had to pay. But, an exercise of a stock option is not a sale, so find out if he owns the stock or sold it.

[grandmabee]

I have had these before from smith barney and there was no 1099B. We have the paper work and on the bottom of the page it said there would be no 1099B issued. But the only loss would be the commissions and fees

so... the fact that no 1099B does not mean there is no sale.