Tax Center: UPDATED! Reporting Company Stock Sales

FAQ Table of Contents:

NQSO Stock

ISO Stock

Restricted Stock, RSUs, and Performance Shares

SARs Stock

ESPP Stock

NQSO Stock

Form 8949 and Sch. D diagrams! How are capital gains taxed when I sell my NQSO shares?

To compute the appreciation since exercise, you take the sales price after commissions and subtract...

Form 8949 and Sch. D diagrams! How do I report a sale of NQSO shares on my federal income-tax return?

You need to complete Form 8949 along with Schedule D for the year of your stock sale and file it with your IRS Form 1040 federal income-tax return. You must...

Form 8949 and Sch. D diagrams! I did a cashless exercise with my nonqualified stock options last year. Since I have no additional gains or losses from the sale, do I still need to report the transaction on Form 8949 and Schedule D of my tax return?

You should list this stock sale on your Form 8949 and include it in the totals on Schedule D. These forms are used to...

Form 8949 and Sch. D diagrams! How do I report a sale of shares in an NQSO sell-to-cover exercise?

To report the sale of shares in a sell-to-cover exercise, you complete Form 8949 along with Schedule D for the year of...

Form 8949 and Sch. D diagrams! I exercised NQSOs, held the stock, and now have long-term capital gains on the sale. Do I get any "credit" on my tax return for the income tax I paid for the spread at exercise?

You may have confused NQSOs with incentive stock options. This situation is different...

Form 8949 and Sch. D diagrams! If I did cashless exercises/sales of stock options from several grants simultaneously, do I need to report each sale separately on Form 8949 and Schedule D? Can I aggregate them in one line because I exercised and sold the stock on the same day?

The details for the shares you sold now go on Form 8949, and Schedule D collects just the column totals from that form. The instructions of Form 8949 require you to...

Form 8949 and Sch. D diagrams! Is the brokerage commission taxed?

The commission either reduced the sale proceeds or was reported...

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ISO Stock

Form 8949 and Sch. D diagrams! I did a cashless exercise with my incentive stock options. Should I still report it on Form 8949 and Schedule D even though the gain is zero? And what about the alternative minimum tax?

By selling the ISO stock when you exercised it, you eliminated the spread at exercise from the...

Form 8949 and Sch. D diagrams! How do I report a sale of shares in an ISO sell-to-cover exercise?

To report the sale of shares in a sell-to-cover exercise, you complete Form 8949 along with Schedule D for the year of...

Form 8949 and Sch. D diagrams! I exercised my ISOs and sold the ISO stock later in the same year. How is this reported on my tax return when the stock price at sale was higher or lower than at exercise?

The calculation of the amount of ordinary income and capital gain/loss will vary according to the...

Form 8949 and Sch. D diagrams! After I have met the ISO holding periods, how do I report a sale on my tax return?

After you have held the stock more than two years from grant and one year from exercise, the spread between the exercise price and the sale price is...

Form 8949 and Sch. D diagrams! How am I taxed if I have made a disqualifying disposition (e.g. sale) of ISO shares in a different year than the year I exercised the option? How do I report this?

The rules are similar to those that apply to sales of ISO shares made in the same year as exercise; however, the difference is...

Form 8949 and Sch. D diagrams! When I sell my ISO shares in a disqualifying disposition, will the broker's commission reduce the amount of ordinary income on my W-2 or the amount of gross sales proceeds on my Form 8949 and Schedule D?

The final IRS/Treasury regulations on ISOs clarify that the amount of ordinary income in a disqualifying disposition is...

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Restricted Stock, RSUs, and Performance Shares

Form 8949 and Sch. D diagrams! How do I report a sale of restricted stock on my federal income-tax return?

You need to complete Form 8949 and Schedule D for the year when you sold your stock and file them with your Form 1040 federal income-tax return. You do this even if...

Form 8949 and Sch. D diagrams! How do I report a sale of shares from restricted stock units (RSUs) on my federal income-tax return?

You need to complete Form 8949 and Schedule D for the year of the sale of your stock and file it with your Form 1040 federal income-tax return. You do this even if...

Form 8949 and Sch. D diagrams! Do I need to report on my tax return the restricted stock I sold or surrendered to my company for the tax withholding?

You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...

Form 8949 and Sch. D diagrams! When I hold restricted stock after it vests and later have capital gains on the sale, will I get any "credit" for the income tax I paid at vesting?

The vesting and the sale are separate transactions. First the stock's value at vesting is taxed, unless...

Form 8949 and Sch. D diagrams! When my restricted stock units vested, my company automatically withheld shares to cover the taxes. Do I need to report these shares on my Form 8949 and Schedule D?

You should definitely report a sale for taxes at vesting if you received a 1099-B that shows the proceeds. The IRS will...

Form 8949 and Sch. D diagrams! How do I report a sale of performance shares on my federal income-tax return?

You need to complete Form 8949 and Schedule D for the year when you sold your stock and file them with your Form 1040 federal income-tax return. You do this even if...

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SARs Stock

Form 8949 and Sch. D diagrams! How do I report sales of shares from stock appreciation rights on my federal income-tax return?

Whether you sell all the stock at exercise or hold the stock and later sell it, you need to complete Form 8949 and Schedule D for the year of...

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ESPP Stock

Form 8949 and Sch. D diagrams! If I make a disqualifying disposition with my ESPP stock, how do I report the sale on Form 8949 and Schedule D of my tax return?

You report the sale on Form 8949 and Schedule D to show your capital gain or loss, regardless of any actual gain or loss. This is the difference between...

Form 8949 and Sch. D diagrams! If I sell ESPP shares after the required holding periods, how do I report the sale on my Form 8949 and Schedule D?

If you sell ESPP shares in a qualifying disposition, you still realize ordinary income in the year of sale. You should...

Form 8949 and Sch. D diagrams! My company's ESPP is not tax-qualified under Section 423 of the Internal Revenue Code. How do I report any gain that results from the sale of my ESPP shares on my federal income-tax return?

The new Form 8949 is where you list the details of each stock sale, while Schedule D aggregates the column totals from this form to report your total long-term and short-term capital gains and losses. However...

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