Basics: Sales

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Marilyn Renninger
Here's some advice for financial fitness: take stock of taxes before you exercise! When and how you exercise your stock options can have a major impact on how much tax and which taxes you'll pay.
The myStockOptions.com Tax Team
UPDATED FOR 2010! Learn how to report your sales of company stock on Schedule D of IRS Form 1040. Our comprehensive guide to Schedule D reporting covers sales of stock from nonqualified stock options, incentive stock options, restricted stock, restricted stock units, performance shares, employee stock purchase plans, and stock appreciation rights.
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FAQs
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Whether you hold stock certificates, hold your shares in a brokerage account, or have an online trading account, you will need the assistance of a stockbroker...
Your company uses one or more "captive" brokerage firms or a transfer agent for...
Not necessarily. If you exercised your option with a company-approved or "captive" broker...
You can place four types of sell orders, depending on your brokerage firm and company rules...
The default method for the distribution of sales proceeds in a cashless exercise is holding them in an account at the brokerage firm...
While you rarely pay commission for the option exercise or ESPP purchase, you owe it when you...
No. It reduces the sale proceeds you report on...
The amount of your capital gain is the difference between your sales price and your tax basis in the stock. However, with stock from equity compensation, your tax basis can be harder to determine. It is...
The treatment for tax-loss harvesting is similar to that of owning and selling any two stocks. The income-tax reporting for multiple transactions is...
Your broker will periodically send you transaction statements...
If you have more than one batch of company stock, you are responsible for providing your broker with enough information to identify which shares to sell. If you do not specify...
You recognize ordinary income for the full value of the cash payment. Any deferred portion of the cash sale proceeds is not taxable until...
If you sell company shares for a loss and buy more company shares within 30 calendar days before or after the loss transaction, the federal tax code will...
A deemed sale is a technique that allowed you to take advantage of the lower capital-gains rate...
You will need to gather certain information to complete Schedule D of your tax return. The broker will send you a Form 1099-B for the proceeds that you use to...
Yes, except when certain requirements under IRS Rev. Proc. 2002-50 are met. This revenue procedure allows...
Perhaps, depending on the structure of the plan. The IRS wants to know about foreign accounts of US taxpayers to be sure taxes are paid on any earnings. Any "US person" with a financial interest...
A clawback is triggered when you leave to work for a direct competitor or engage in...
For various reasons, clawbacks are becoming more common. According to surveys of proxy statements and other sources, the exact percentage of companies that use clawbacks is...
Blackout periods are times when you are prohibited from trading your company's securities, and window periods are times when you are allowed to trade. Some companies also prohibit...
To prevent insider trading, and to reduce the need to constantly monitor and evaluate...
Using a blind trust goes beyond the protections of Rule 10b5-1 plans, yet has more restrictions. These are irrevocable grantor trusts with...
"Garnishment" is a legal process in which a debtor pays an obligation with property and/or goods that are owed to or belong to the debtor but are in the hands of a third party. Whether this remedy applies to stock options depends...
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