"Joe Dane" <joedane[at]comcast.net> wrote:

- quote -

Rather than being payment for a sale of 25% of your stock,
if the payments are going to be 4 equal payments, then it's
probably more appropriate to treat it as a sale of 100% of
your stock on the installment basis.

Things to take into consideration are:
1. the short-term or long-term character of the gain/loss
won't change even though you receive payments over a period
of years, that character is set as of the sale date.
2. assuming you're getting 25% of the total amount you're
going to receive over each of the 4 years, you'll recognize
25% of the gain or loss in each of those years.
3. your basis in the stock is whatever your initial
investments in the original corporation was

In TurboTax, you can set it up as an installment sale and
the gain will be computed for you each year by entering the
basis info in the first year it appears and then the
payments received each year thereafter.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I had founder stock in a very tiny company that eventually
wound up getting bought out long after I had moved on. Got
my first check in June of last year, and should get a check
about then for the next 3. Need to know how to list this in
TurboTax. I think I list it as a long term capital gain with
25% of the stock being sold, but not sure how to calculate
the basis for the payout as well as the purchase price I
paid.

Thank you very much in advance.
JD

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >