<hotblues20[at]netscape.net> wrote:

- quote -

The sale of the options will be reported on your W-2 as
additional wages.

Gene E. Utterback, EA

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Assuming you do a "cashless" excercize,
The witholding will be relected on your employers W2.A code
V, Box 12 entry on your w2 will show the net amount
realized from the exercize.

In effect, the gain on the sale is taxed as ordinary income.
In some cases you may get a separate W2.

You may also get a brokers statement reflecting the
witholding. This is for information only, do NOT report the
witholding again since it is already includede on your
regular W2.

If the broker issues a 1098B for the sale(they are no longer
required to do so for this type of activity) , Your basis
on schedule D will be the stock FMV at the end of the
trading day less less any broker comissions. The sale price
will what the broker sold it for, the sale date and
aquisition date will be the same day.

As a rule, if schedule D is needed. you will show a small
sort term loss equivalent to the broker fees and comission.

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hotblues20[at]netscape.net writes:

- quote -

The income and withholding are included on your W-2. You
report the sale on Schedule D, which will show either a wash
or a loss in the amount of any fees that you paid.

An excellent source for information on options is
www.fairmark.com.

Phil Marti
Clarksburg, MD

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<hotblues20[at]netscape.net> wrote:

- quote -

I assume you plan to exercise and sell at the same time and
pocket the difference between market value and exercise
price, less taxes?

The company will add the difference between market value and
exercise price, known as the bargain element, and add the BE
as wages on your W-2 form, and withhold taxes also on your
W-2 form, deducting the taxes from net pay, If not enough
net pay to allow for the payment of tax, ask them how they
will handle it. There are a couple of possibilites, so ask
them.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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hotblues20[at]netscape.net writes:

- quote -

Yes. That is a requirement of federal law.

- quote -

Your W-2 will show the income tax they take out in the
Federal Taxes Withheld box. It's no different than the
money they take out of your regular paychecks.

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

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So I am needing some roof repair on the house and I have a
vested stock option at work that has been sitting there
since 1998.

At my Co. website, they have a breakdown of the state and
fed taxes that THEY will take out before I get my cash.

Now this may be a stupid question, but how will the option
be reflected on the 1040 if they are already taking the tax
out upfront?

I ask as I am wondering whether to execize before of after
the new year...

Thanks,

Bluesman

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