@qbteachmt You mentioned that: The release of escrow is not a taxable event, when that value was already reported as taxable compensation. That's why I describe it as part of Banking, not W2 or 1099-B.
But TP informed me that the $30,000 that was set aside as an escrow from the merger consideration to be received in the future and $37,000 that were made into the escrow fund based on milestones that were achieved were never reported and taxes in 2017, 2018, 2019 and 2020 returns. None of these two amounts were reported on W-2 or f1099-B and taxed in 2017, 2018, 2019 and 2020.
Therefore, it seems to me that $30,000 and $37,000 (totalling $67,000 as per f1099-B) should be reportable in 2021 return. What I am not sure is whether the $67,000 should be taxes as ordinary income wages or short-term capital gain (to treat $67,000 as part of the 2017 transaction) or long-term capital gain (to treat $67,000 as part of investment in 2021 with a basis of zero).
Any comments? Thank you!