In the "You Got It" weekly series, we will answer a question of our customers are on Facebook, Twitter, TaxACT blog and around the web
issue :.
After entering my information in the 1099-B form, I think I'm getting double taxed on the sale of my stock options and employee stock ESPP shares. I have not adjusted the basis of what is shown on my 1099-B form, but it seems that maybe I'm supposed to do a .? adjustment because the products already appear as income on my W-2 What should I do here
Answer:
employers often compensate employees with benefits other than wages. Stock options and action plans of purchasing employees (ESPP) are increasingly popular in compensation packages.
In general terms, these plans offer employees shares in their company in a free or a reduced price. On the surface, obtaining stock units for minimal cost, looks great, but the IRS will not let this go unnoticed income.
These plans generate income in two categories, ordinary income and capital gain / loss of income.
Any capital gain or loss is determined at the time you sell the stock. The amount is determined by taking the product sales, minus your adjusted cost basis.
Your adjusted cost basis is generally made up of two amounts, income compensation and acquisition costs. The acquisition cost is just that, the price you pay to acquire the stock.
benefit plans differ in direction and to receive share units. Some plans provide the stock for you, without charge, in this case, the cost is $ 0.
Other plans allow employees to buy shares at a reduced price. The discounted price you pay for each unit is your cost.
Any amount of income compensation is essentially the advantage that you received at the time of purchase. If the stock has been assigned to you without charge, pay your income the fair market value (FMV) of the stock you have freely received.
If you bought the stock at a discount, the discount is income compensation.
you will receive a 1099-B form in the year you sell the stock units. This form will be used to report a capital gain or loss resulting from this transaction on your tax return.
We must review the basic amount of the cost on the 1099-B form and compare it to the basic amount adjusted in your investment records.
compensation income if the amount of the basis of the costs reported on Form 1099-B form does not match your adjusted cost basis for your records, you can include code B setting on your tax return. reported on the most probable W-2 form is not included in your cost basis on the 1099-B form and will require an adjustment amount using the code B.
If the amount of the base cost was not reported to the IRS on form 1099-B, and enter your cost basis on your return based on your personal investment records
to enter form 1099-B in the TaxACT program :.
- from your return TaxACT (online or desktop), click the Q Federal & A tab
- Click on investment income to expand the category then click gain or loss on sale of investments
- Click on the capital gain or loss (1099-B form)
- Click Add to create a new copy of the form or click review to consider a form already created
- the program will run with the interview questions for you to enter or revise the appropriate information.
You will need to enter the description of the property, date acquired, the cost or other basis, the date of sale, product sales, and any income tax federal retained.
Note: 1099-B form you received or not a report the date acquired or the cost base. This information is retained by you and is required to complete the correct reporting of transactions on Schedule D.
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