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W-2 Box 12 Code V

This past year, I sold nonqualified stock options (NQSO) and restricted stock from my employee stock plan. I am not able to figure out how to report the cost basis on schedule D.
Based on the information below from W-2 and broker statement (I probably included more info than needed), I cannot figure out how to calculate the cost basis, nor more importantly how to calculate the gain/loss. I also wonder how the W-2 code V came to $20,701.20, but I am not sure if that matters at all for now.
Any help on what to write to schedule D is greatly appreciated.
Here are the numbers
***First, W-2 code V: $20,701.20
***Second, For the stock options, I have:
Grant Date: 06/24/2005
Grant Type: Nonqual
Grant Price: $13.19
Sale Price:$23.72
Share Exercised: 1000
Shares Sold: 0
Gross Proceeds:$23,720.00
Taxable Gain: $10,530.00
Total Price: $13,190.00
Commission/Fee: $50.41
Taxes Withheld: $4,043.53
Net Proceeds: $6,436.06
***Third, For the restricted stock, I have:
Disbursement Details:
Gross Proceeds: $10,120.05
Commission: $19.95
SEC fee: $0.18
Net Proceeds: $10,099.92 (USD)
Vest Details:
Vest Date Cost Basis Shares Sold
05/01/2009 $12.72 147
04/03/2010 $26.08 240

Order History:
Transaction Date Quantity Price
Order Placed 09/22/2010 387 $26.15
Order Executed 09/22/2010 387 $26.15




    For a very brief explanation of what is happening here:

    When you exercise (buy) stock from options for which you have not yet paid, and you sell the stock that you just purchased by exercising those options, pretty much all of the money is treated as compensation(wages). Both the money used to buy the stock(option price) and the sales price of the stock come form the sale, so all of the money is wages, both gain and cost.

    The company withholds taxes from cost of the exercise(since you never had the money to buy the stock to begin with) and they withhold from you the tax on the gain from the net proceeds of the sale less the cost.

    You have then bought stock at the exercise price and sold stock at the FMV(presumably higher than the cost) but ALL of that income has been included as wages; therefore, you generally have a cost basis in the stock the same as the sales price of the stock(except for perhaps some selling expenses).

    Your Sch. D should have sales price less cost = zero(approximately).


      If I understand you fully, then I'll avoid paying double taxes on these couple of trades, which is worth about a thousand dollars.  Isn't that cool

      Just to be certain that I understand this fully, should I have three lines on the schedule D that look like what I have below:

      • Date Acq,      Date Sold, Sale Price,    Cost,   Gain
      •   4-3-2010,   9-22-2010,      $6264,    $6276,  -$12       (short term)
      • 6-24-2005,   9-17-2010,   $23670,  $23720,  -$50        (long term)
      •   5-1-2009,    9-22-2010,     $3836,    $3844,    -$8         (long term)

      I'm still not certain how the code V amount of $20,701.20 -  Do you know, or does it not matter?  A piece of info that I left out before is that for the NQSO, the exercise market value is $23.65, and the sale price is $23.72.  I'm not sure if that matters or not, but it might shed some light on the the W-2, box 12, code V amount.




      • Somewhere along the way the options info looks incorrect. You both exercised the options and sold the stock, exercised for 13.19 and sold for 23.72. Your note says 0 sold. But if you take the total proceeds, 23720, and then pay back the payment to the company for the stock purchased(13190) less the taxes and commissions on the sale you were left with the 6436 cash to you. What were the taxes w/h? FIT? FICA? Medicare? State IT? Somewhere in there you can come up with the 20701 figure. Otherwise, fuhgettaboutit.
      • E-Trade did not specify the taxes on the restricted stock, just the stock options.  I don't know the difference between sold and excercised.  The shares were granted to me, I never paid for them, and you could say that I never really owned them.  I just sold them, and had the profits mailed to me, less the commissions.  My reply probably does not explain much to you, but it really wall mostly kind of magical. In any case, does the schedule D above look OK?  If so,then I'll send that off to the IRS. Thanks, Rob
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