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Stock Options Column G Adjustments

  • 1.  Stock Options Column G Adjustments

    Posted 07-10-2020 08:50 AM
    HI Everyone, does anyone have a recommendation when exercising stock options regarding the reporting.

    Some brokerage houses only report the sale price, others report sale and cost which usually lines up with the separate exercise statement from the employer.

    Its my understanding that if the employee for example:

    Takes 500 shares at $25 = 12,500

    but market price is $50 = 25,000

    and its sold same day.

    You report the cost basis and sale price as 12,500, 25,000 recognizing a gain of 12,500 and the clients withholdings on the W2 usually reflect increased withholdings to cover the tax from the sale. The stocks are reported in the covered section which basis is reported.

    My client says that you must make an adjustment on column G wiping out the gain because they've already recognized and paid the gain because its a same day sale.

    I haven't encountered this scenario before. Any advice? Thanks in advance !

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    Stephen Hatzistefanidis
    KONSTANTINOS HATZISTEFANIDIS, CPA
    Astoria NY
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