Thanks for the replies. When trying to talk to my wife
about this, it reminds me Abbott and Costello doing "Who's
on First".

me "where'd the stock come from?"
her " I bought them"
Where'd you get the money?
From my stock.
What stock
The stock they gave me.
I thought you had to buy the stock
I did
So why did you sell stock
So I could buy it
HUH????????

Here's what's going on. The company gave her 115 shares of
stock that was worth 28 bucks a share a few years back.
They gave her the option to buy 115 shares at 28 bucks even
though now it is worth $48. She sold some of the stock to
get the cash to buy. So she sold 88 shares to get the money
to buy the rest.

I don't know if it's right or not, but her boss who is the
head of Public Financing of a HUGE company told her this.
Take the difference of the 115 shares from $48 to $28 a
share. I came to around $2000.

So that's it, it's done and submitted.

thanks,

Al

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I *think* the figures will make a bit more sense if it turns
out that what's being described is an acquisition of 115
shares being paid for with a "sell-to-cover" -- in other
words, selling enough shares (which in this case is 88) to
cover the purchase cost plus taxes.

I haven't looked closely enough at the numbers to see if
that's what's happening, but I think it might be.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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al koz <> writes:

- quote -

It is too confusing to me. If this was a same-day exercise
the basis is what she paid for the shares plus the amount
deemed to be wages and included in her W-2. Usually the
Schedule D outcome is a small loss equal to the service
charges.

There's tons of good information about options at
www.fairmark.com.

Phil Marti
Topeka, KS

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<al koz> wrote:

- quote -

I'm no expert, but it looks like she acquired 115 shares
under the option, and only sold 88 shares?

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Looking for a bit of help understanding what is on my wife's
1099-B. She really doesn't know what it is, or I'mhaving a
hard time understanding what she's trying to explain.
Either way we both have different impressions of what's
taxable.

Here's the info:
Date of sale 11/12/03

Quantity 88

Description (box 5)
exercise quantity 115
grant price 28.6513
option cost 3294.90
fed tax 574
fica tax1 134
fica tax 2 31
state tax 61
local tax 1 84
local tax2 ,43
service fee .20

Price 47.50

Gross proceeds(box 2) 4179.80

Fed tax withheld blank

I've read some of the papers that came with the 1099-B, it
states: Box 2 shows the proceeds from tranactions involving
stocks.................report this amount on schedule D.

Excuse me if I got it wrong, but here's what it looks like
to me. 88 X 47.50 = 4179. Then the stock price changed to
28.65. In order for the total value to be the same, 115
shares at 28.65, plus the tax comes out to 4179.80.

My wife's boss is telling her that the gain is only in the
2k range, but she doesn't know how he got that number.

I hope this isn't too confusing. If you can shed some light
on this, I would really appreciate it.

thanks,

Al

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