On Feb 17, 7:50 am, Rich Carreiro <rlc-n...[at]rlcarr.com> wrote:

- quote -

And furthermore, he might end up with a loss equal to the
commissions. Suppose the W2 income because of profit from exercise is
$4000, and the proceeds are $16000. If the commissions are $20, then
the cost basis on Schedule D is $16020, and you have a net loss on
Schedule D.

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Roy Starrin <starrin[at]verizon.net> writes:

- quote -

Which is correct.

- quote -

The sales proceeds are required to be reported on 1099-B, yes.

- quote -

It gets reported in both places. However, he has to adjust the
basis in the sold stock upwards by the amount reported on the W-2.
This will eliminate virtually all the apparent capital gain and thus
eliminate the apparent double-taxation problem.

See here as well:
http://fairmark.com/execcomp/index.htm

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

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Friend called me. He says he exercised some employee stock options,
which he immediately sold, in 2008. His company included the profit
in his W2 as I understand it, as well as including it in whatever
reports such maneuvers. He said if he reports it under both
categories it appears to really jack up his taxable income. Since
this is beyond me (to whom he came for advice) based on what little
info I have, where should I tell him to look, or handle it, or
whatever. Best I could come up with was to call IRS and ask them.

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