Arthur Kamlet wrote:

- quote -

Thanks again Art. You were exactly correct and there was a
1099-B which turned up. Submitting amended returns should
fix it.

BC

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Thank you Art and Steve. The search is on for missing
documents. Yes, it's a publicly traded stock.

BC

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sftydvr[at]juno.com <sftydvr[at]juno.com> wrote:

- quote -

It doesn't sound correct to me. I think there's no harm
in putting the sale on Schedule D even if there is no
loss or gain.

Normally, there always is a small loss or gain because the
amount on the W-2 is based on the day's closing stock
price, not the actual sale price.

Is this by chance a non-publicly traded stock?

Steve

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sftydvr[at]juno.com <sftydvr[at]juno.com> wrote:

- quote -

There were distinct events here.

a) You exercised the options and acquired stock.

The price you paid was the exercise price plus the
difference between market value on exercise and the exercise
price. That amount is called the Bargain Element (BE) and
is paid to you as taxable income and adds to Form W-2 box 1
and is listed as Box 12-V.

As long as you report the W-2 income, you need not do
anything special to report the income represented by the BE.

b) You sold the stock acquired through exericse.

This is a reportable, taxable event. Report the sale on
Schedule D. If you don't think you received a 1099-B, you
report the sale anyway.

Your cost basis is the exercise price plus the BE, which is
also the market value at exericse. Add the sales commission
or broker fee and you should end up with a small short term
loss equal to the commission/fee for same day exercise and
sale.

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

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I have a similar situation; the option was issued and
immediately sold. There was no 1099B, it appears. It was
reported as W-2 block 12, code V, income from exercise of
non-statutory stock options. It appears that the employer
as the issuing company handled everything and just reported
it as income. Does this sound correct? No Schedule D
impact?

BC

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Given that your stock purchase was reported on your W-2,
this appears to be a non-qualified option purchase and sale.
The bargain portion of your purchase cost is on your W-2 and
has already been taxed. This makes your cost basis what you
paid for the stock PLUS this bargain element. You should
have reported the sale of stock on Schedule D with the cost
basis equal to the sum of purchase cost PLUS bargain
element. If you sold it the same day, you would have either
broken even or had a small gain or loss. If you can't deal
with the complications of this situation yourself, file an
amended return through a professional tax practitioner. Tell
the IRS you are amending the return. They may owe you money.

Linda Dorfmont E. A., CFP, CSA

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"Jana" <mrjana[at]gmail.com> wrote:

- quote -

No you wouldn't have. You didn't report what your basis in
the sold stock was.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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"Jana" <mrjana[at]gmail.com> writes:

- quote -

As you can see, you should have.

- quote -

That's because the IRS has no choice but to assume your
basis in the stock was zero because you didn't report. You
need to amend your 2003 return so it is accurate.

- quote -

No, you wouldn't have. Your basis in the stock isn't zero,
after all.

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

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Jana wrote:

- quote -

Had you properly reported the stock sale you would not have
been taxed twice. Your cost basis in the shares that you
sold is what you actually paid for those shares plus the
amount of income that was added to Box 1 (wages) of your
W-2. As this was a same day sale, you probably sustained a
very small loss equal to the fees you paid. File an amended
return for 2003 and include the sale on Schedule D using the
proper cost basis.

--
Alan
http://taxtopics.net

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Jana <mrjana[at]gmail.com> wrote:

- quote -

In fact, you should have reported it, but you would not
have been taxed twice. Here's how:

On schedule D, report the same day purchase/sale as
a short term capital gain, with the sale price being
the total proceeds (as reported on the 1099),
and with the purchase price being the sum of what you
paid to exercise the options, and the compensation income
associated with this sale reported on the W-2. Since
these two will be very nearly the same number, there is
very little gain or loss reported on schedule D.

Since you're facing an audit, you would be wise to
consult a tax pro as to how exactly to proceed at
this point.

Hope this helps.

Steve

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I exercies some stock options in 2003 and since it was a
same day sale and the whole profit out of my exercise is
reported in w-2 i did not report form 1099-B provided by my
stock trader.

Now the IRS has audited my 2003 return and want me pay those
taxes plus interest plus some accuracy penalty which comes
to a huge amount. What can I do here? I know I made a
mistake by not reporting the 1099-B, but if I had reported
1099-B I would have been taxed twice. Any help is greatly
appreciated.

Thanks,
-Jana

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