Non-Statutory Stock Option (Code V on W2)

[hattiemwl]

I need help because I am so confused on how to report non-statutory stock options on my client's tax return. I have entered the information from the 1099-B and it brought the taxpayer refund to owing.

My client sold company stock, his W-2 shows Code V in box 12 for $9,429. I understand the W-2. His 1099-B from the brokerage firm who handled the sale and the proceed ($10,665) minus cost basis ($6,619) shows gain of $4,046.

So I included the 1099-B info on his taxes, but it seems like this is reporting the gain twice and it goes from refund to owing.

What am I doing wrong? Or, have I entered the information correctly, and the client does owe?

[sjrcpa · Accepted solution]

1.You need to know how many shares the $9,429 on the W-2 is for.

2. Divide 9,429 by number of shares to get ordinary income per share.

3. Take the per share amount from Item 2 and multiply by the number of shares sold per 1099-B. Add this to the covered cost of $6,619 to get the total basis of shares sold. 

Theoretically, you'll wind up with a very small gain or loss on the sale.

[hattiemwl]

Thank you, I will do this.

[hattiemwl]

So does the gain and loss goes on Schedule D.

[sjrcpa]

Yes