Tax Center

How To Report Sales Of Company Stock

The myStockOptions.com Tax Team
UPDATED FOR 2009! 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.

Restricted Stock & RSUs: What You Must Know To Avoid Tax Return Mistakes In 2009

Bruce Brumberg
Restricted stock or restricted stock units (RSUs) bring their own special issues to your tax return, and they can be more complicated than you think. Avoid pitfalls with reporting any shares sold for withholding, your income at vesting, any dividend income, your capital gains at sale, and more.

Answers To Tax Season Questions & How To Avoid Common Mistakes

Bruce Brumberg, Editor-in-Chief
myStockOptions.com
Adapted from a webinar by the editor-in-chief of myStockOptions.com, this PowerPoint (in PDF) encapsulates what compensation professionals and advisors must know about tax season issues plan participants face, and how to answer their questions and help them prevent mistakes. The coverage includes the relevant provisions of the 2009 stimulus law. (Premium Members can request permission to use the presentation for employees or clients.)

Avoid Tax Return Mistakes With Stock Options & ESPPs: What You Need To Know In 2009

Bruce Brumberg and Lynnette Khalfani
Tax returns can be onerous. Read this article if you are puzzled by Form 1099-B or don't know how and where to report sales of company stock from options or employee stock purchase plans.

ISOs: Tax Return Tips And Traps

Tax reporting with incentive stock options (ISOs) can be tricky. Learn what you need to report on your return at each stage of your ISO's life cycle.

NQSOs: Tax Return Tips And Traps

Whether you complete your own tax return, want to review what your tax preparer did, or want to check what your software produced, it's important to understand basic reporting requirements of stock options. Let's review what, if anything, you need to report on your tax return.

Decisions At Grant With Restricted Stock (Part 2): The 83(b) Election Risks

Tom Davison
Part 1 examined the basic facts of restricted stock and the decisions you need to make at grant. Part 2 explains the risks of the 83(b) election, which lets you choose to be taxed at grant rather than vesting.

Stock Option Fundamentals (Part 5): Incentive Stock Option Taxation & Alternative Minimum Tax

Marilyn Renninger
You're ready to delve deeper into how and when different taxes apply to ISOs, including the AMT. You need to consider taxes at exercise and at sale to put together a strategy that maximizes the value of your options.

Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 1)

Ellie Kehmeier and Elizabeth Drigotas
The final rules clarify and consolidate a tangle of proposed, temporary, and final regulations, as well as other guidance, that governed the taxation of ISOs, including rules for disqualifying dispositions.

Final ISO Regulations Affect Stock Plan Design, Optionholders, And Advisors (Part 2)

Ellie Kehmeier and Elizabeth Drigotas
The final rules clarify and consolidate a tangle of proposed, temporary, and final regulations, as well as other guidance, that governed the taxation of ISOs, including rules for the $100,000 ISO limit.

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Schedule D diagram! How are capital gains taxed when I sell my NQSO stock?

If you hold stock acquired from the exercise of an NQSO for more than one year, the appreciation is...

Schedule D diagram! How do I report a sale of nonqualified stock options on my federal income-tax return?

You need to complete a Schedule D, Capital Gains and Losses, for the year of the sale of your stock and...

Schedule D diagram! I did a cashless exercise with my nonqualified stock options last year. Do I need to show the transaction on Schedule D of my Form 1040 tax return, or can I ignore the broker's statement (1099-B) since there are no gains or losses to report?

You should still file Schedule D, which is used to report capital gains and losses...

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

Though each grant adds a different amount of money to your taxable ordinary income, the tax basis of all the shares is...

Schedule D diagram! 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?

This differs from the situation with ISOs in which your exercise-and-hold triggers AMT and you then have a tax credit...

Schedule D diagram! Is the brokerage commission taxed?

No. It reduces the sale proceeds you report on...

Schedule D diagram! I did a cashless exercise with my incentive stock options (ISOs). Should I report the transaction for capital gains purposes on Schedule D even though the gain is zero, and should I worry about the alternative minimum tax (AMT)?

By selling the ISO stock at the same time you exercised it, you eliminated the AMT. The same would be true if you had sold the stock at...

Schedule D diagram! 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 is higher or lower than at exercise?

If you sold the stock at a price higher than it was on the day of your exercise, the spread at exercise is still...

Schedule D diagram! After I satisfy 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 sales and exercise prices is...

Schedule D diagram! 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; the difference is that you are taxed in the year of the sale of the stock...

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