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ISO disqualifying disposition
Im new at this ISO disqualifying disposition, where do I enter it, just as a other income? Thank you
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The bargain element should have been reported in Box 1 of the W-2, failing which the employer can't take a corporate tax deduction.
That compensation would form part of the basis and would normally have been captured on the 1099-B by the custodian brokerage.
Double check the compensation breakdown and ISO exercise/sale statement to verify the above.
As far as tax reporting goes, the sale of stocks acquired from ISO, whether or not the disposition is qualified, it's done the same way on Sch D/F.8949 like any other stock transactions.
If your client was subject to AMT previously for the exercise of ISO, there may now be an MTC.
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