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Vested stock exercise.

Level 2

Client exercised vested stock.  1099B boxes B and E amounts.  Proceed amounts, no cost basis amounts, all gain.  

Does the client have a basis in the stock?  Would the clients basis be the FMV of the stock when exercised?  What questions if any should the client ask the employer to assist in getting the information that is needed?  

Thank you for your assistance. 

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1 Comment 1
Level 15

What kind of equity compensation plan?  Restricted Stocks, Restricted Stock Units, ISO, NQSO, etc.? 

Check the grant, exercise, and supplemental documents your client should have received.  Generally, your client will have a basis to the extent the option price was paid and the bargain element was already subject to tax as compensation as required by law, depending on the type of plan it is.

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