- quote -

No, I didn't file a Section 83(b) on these, and it would have been
quite wise to do so. I didn't pay any taxes on these shares until the
time of vesting. Unfortunately, it looks like I'm stuck with that
decision for the remainder of the shares that still need to vest over
the next 4 years.

One piece of information that might be prudent here is that the stocks
I purchased were actually worth about $25 per share at the time of
purchase, even though I only paid $0.001 per share. I'm not sure if
this really matters though. They were worth more than that at the
time of vesting/selling. (Obviously making my example dollar amounts
hypothetical.)

- quote -

I guess I just don't understand what cost basis actually is then. So
by listing the original gross value ($1000) of the stocks, is that
going to tell the IRS that I've paid my taxes on these stocks?
Thanks again for your help!

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dorlockt[at]hotmail.com writes:

- quote -

No, that doesn't really change anything. In fact, it makes
it even more straightforward.

Did you file a Section 83(b) election on these shares to treat
them as 100% vested for *tax* purposes, or not? Because that
matters crucially in determining the basis.

- quote -

Ok -- that would indicate that you didn't file an 83(b) election,
because if you did, there wouldn't be wage income each year as
the stock vests. If you're ever again in a situation like this
(buying restricted stock up front for a very low price), strongly
consider making a Section 83(b) election on it.

In any event, that doesn't change that your basis is exercise price
plus wage income recognized upon vesting. The wage income is the
spread between the FMV of the stock and the exercise price on the
day the block vests.

So your basis is $999.70 + $0.30 = $1,000

- quote -

No. You add exercise price to "Restricted Stock Award" to get your
basis. In this case, your basis is $1000. Since it was sold
for $665, you have a capital *loss* of $335 on the sale.

--
Rich Carreiro rlc-news[at]rlcarr.com

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Mar 17, 5:49*pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -

Thanks Rich. I'm still a little unclear though.

These Restricted Stocks are a little different than normal stock
options, I think. They were a part of my original compensation
package at my hire date, but I also bought them outright on that date
as well. I paid $0.001 per share on my date of hire for 1500 shares,
of which 300 shares vest every year after my date of hire. When I
reached my first year anniversary, I did a "paperless transfer" where
I sold all of them and allowed my company to take out the appropriate
shares to pay for taxes and admin fees of the broker handling the
stocks.

So, I'm wondering what the exercise price might be in this case. I'm
guessing it would be $0.30? (300 x $0.001)?

I think an example might help here.

W-2:
Restricted Stock Award: $999.70

Confirmation of Release:
Award Price: $0.30 (300 x $0.001)

1099-B:
Total Gross Proceeds: $665.00

So in this example would I subtract the Total Gross Proceeds price
from the Restricted Stock Award and then add the Award Price to that
and use that as my cost basis?

$999.70 - ($665.00) + $0.30 = $335

Is this correct?
Cost Basis = $335 ??

========================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding.

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<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

On Mar 17, 1:38*pm, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:
- quote -

And the one bonus from all of this is that could have a net loss on
Schedule D equal to the commission. The W2 includes the difference
between exercise and strike price times the number of shares. But
they may not have subtracted out the commissions. So you get to
report it on Schedule D.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

dorlockt[at]hotmail.com writes:

- quote -

You need to report this on a Sched D, or else the IRS will
believe the entire $XXXXX.XX is a capital gain and dun you
for additional taxes, interest, and penalties.

You report the proceeds as listed, and for basis, use the
option exercise price increased by the amount of income from
the exercise reported on your W-2.

--
Rich Carreiro rlc-news[at]rlcarr.com

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

I'm a bit unclear if I need to file a Schedule D for proceeds from a
sale I made in 2007 of Restricted Stock Options from the company that
I work for.

I've received a 1099-B form in a consolidated statement from my tax
broker that lists
Box 2: Total Gross Proceeds - $XXXXX.XX
Box 4: Total Federal Income Tax Withheld - $0

However, the amount listed in Box 2 is actually the Net Proceeds,
after I sold the stock and paid all taxes and admin fees up front. I
was under the impression that all of this was going to be taken care
of on my W-2 as ordinary income because I sold it immediately upon
vesting and I paid the taxes in the same transaction.

Do I need to file this on a Schedule D, or is this already taken care
of in my W-2?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >