Non-Qualified Stock Options and Schedule D?

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Subject Author Date Non-Qualified Stock Options and Schedule D? Bonnie Forman 02-03-2009  Re: Non-Qualified Stock Options and Schedule D? Phil Marti 02-03-2009   Re: Non-Qualified Stock Options and Schedule D? Steve Pope 02-03-2009  Re: Non-Qualified Stock Options and Schedule D? joeu2004 02-04-2009   Re: Non-Qualified Stock Options and Schedule D? Steve Pope 02-04-2009  Re: Non-Qualified Stock Options and Schedule D? Mark Bole 02-04-2009  Re: Non-Qualified Stock Options and Schedule D? Bonnie Forman 02-05-2009   Re: Non-Qualified Stock Options and Schedule D? Steve Pope 02-03-2009
Posted by Bonnie Forman on February 3, 2009, 9:12 pm Please log in for more thread options Hello - In 2008 I exercised some of my company stock options I was given in 2002. It was a Cashless transaction. My companies stock options are handled through Merril Lynch. Shortly after the transaction I received some paperwork showing the details of the transaction, including taxes and fees that were withheld. This income and tax withholding is included on the W2 form I received from my company. (There is a V in box 12c, and I've done the math to confirm it was included.) I am using Turbotax to do my taxes. Since the income was already added and taxes were withheld, do I still have to enter it in Turbotax (which I believe will include a Schedule D)? Won't it then add it to my income again? Also, can I deduct the Merrill Lynch fees and commissions? TIA Bonnie -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on February 3, 2009, 9:33 pm Please log in for more thread options "Bonnie Forman" wrote: > In 2008 I exercised some of my company stock options I was given in > 2002. It was a Cashless transaction. My companies stock options are > handled through Merril Lynch. > > Shortly after the transaction I received some paperwork showing the > details of the transaction, including taxes and fees that were withheld. > > This income and tax withholding is included on the W2 form I received > from my company. (There is a V in box 12c, and I've done the math to > confirm it was included.) > > I am using Turbotax to do my taxes. > > Since the income was already added and taxes were withheld, do I still > have to enter it in Turbotax (which I believe will include a Schedule > D)? Won't it then add it to my income again? Yes you do, and no, it won't. The amount deemed to be wages (the box 12 "V" amount) adds to your basis. On Schedule D you'll wind up with a short-term loss equal to the fees. Don't try to do this through the interview. Use Forms mode to directly enter the stock sale to a 1099-B input screen. -- Phil Marti Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Steve Pope on February 3, 2009, 10:15 pm Please log in for more thread options >"Bonnie Forman" wrote: >> In 2008 I exercised some of my company stock options I was given in >> 2002. It was a Cashless transaction. My companies stock options are >> handled through Merril Lynch. [snip] >Yes you do, and no, it won't. The amount deemed to be wages (the box 12 "V" >amount) adds to your basis. On Schedule D you'll wind up with a short-term >loss equal to the fees. Actually it will be a different, small amount. This is because the W2 figure is based on the closing stock price on the day of the transaction, whereas the sales price on the 1099 is based on whatever price the trade was actually made at, intraday. Steve -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by joeu2004 on February 4, 2009, 12:18 am Please log in for more thread options On Feb 3, 7:15 pm, spop...@speedymail.org (Steve Pope) wrote: > > The amount deemed to be wages (the box 12 "V" > > amount) adds to your basis.  On Schedule D you'll > > wind up with a short-term loss equal to the fees. > > Actually it will be a different, small amount.  This is because > the W2 figure is based on the closing stock price on the day > of the transaction, whereas the sales price on the 1099 is > based on whatever price the trade was actually made at, > intraday. For exercise-and-sell transactions that occur on the same day, companies are permitted to use the sales price as the FMV (basis). That might be a "recent" change (i.e., some time in the last decade!). I remember that it used to be as you describe. (But in the past, the W2 figure was the FMV as determined by the company. That is not always the closing price. Some companies use the daily average. There might be other accepted practices.) -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Steve Pope on February 4, 2009, 12:47 am Please log in for more thread options >On Feb 3, 7:15 pm, spop...@speedymail.org (Steve Pope) wrote: >>> On Schedule D you'll wind up with a short-term loss equal >>> to the fees. >> Actually it will be a different, small amount.  This is because >> the W2 figure is based on the closing stock price on the day >> of the transaction, whereas the sales price on the 1099 is >> based on whatever price the trade was actually made at, >> intraday. >For exercise-and-sell transactions that occur on the same >day, companies are permitted to use the sales price as the >FMV (basis). That might be a "recent" change (i.e., some >time in the last decade!). I remember that it used to be as >you describe. Thanks. It could easily have changed in the last few years, without me noticing. Steve -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Re: 1099-B Restricted Stock Options sale...Do I need to file a Schedule D? March 17, 2008, 10:29 pm Stock Options February 18, 2007, 9:51 pm stock options April 15, 2006, 2:59 am Statutory Stock Options? How to tell? 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