Tax Returns Quiz

Tax Returns Quiz

Take a few minutes to test your knowledge of the tax-return reporting for equity compensation. (Mistakes here are far less costly than errors on tax returns!)

Please answer the following 13 questions. This quiz is also a course of study. The answer key links to content on the topic for follow-up reading. For in-depth courses of study that offer CE credits, see the myStockOptions Learning Center.

1. If you sold stock last year, which of the following IRS forms will you need for your tax return, along with any other information provided by your broker or your company?

2. What are the top tax rates on ordinary income and capital gains?

3. If you sold stock during the calendar year, which tax forms do you file with your IRS Form 1040 tax return to report the sale?

4. What is the cost basis of stock that has been sold?

5. What is a covered security for the purposes of cost-basis reporting on Form 1099-B?

6. In the cost basis on Form 1099-B, which of the following does the IRS prohibit brokers from including?

7. Which of the following statements is false?

8. If the cost basis reported on Form 1099-B is too low, what steps should be taken on Form 8949?

9. If the cost-basis box on Form 1099-B is blank, what steps should be taken on Form 8949?

10. How do you report a sell-to-cover stock option exercise on Form 8949?

11. If you exercise incentive stock options and hold the shares through the end of the calendar year of exercise, which IRS form is used to calculate the alternative minimum tax?

12. What triggers tax reporting with a Section 423 employee stock purchase plan?

13. What is a wash sale for tax-return-reporting purposes?

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