If someone exercised stock options, and it shows up on the w2 under line 12 as a V, do I still need to fill out the exercise of stock options worksheet, it looks to me the amt add's it back in and that it would be taxed twiced if I add the worksheet
There's a box on the worksheet to check if it is or is not included on the W-2.
Like just about all worksheets in PS, this is optional. In the past I've actually caught W-2s that were incorrect and had to be amended so I always use the worksheets to nail down the stock option numbers and tie back to the Code V amount.
I haven't done one yet this year and I'm a little curious as to how the worksheets will interact with Schedule D / 8949. I know I don't always see 1099-Bs for these things.
Also, if you have a circumstance where the client has left employment and subsequently sells stock acquired by option but still within the 2 year window these don't always make it back to the W-2 but they still should be taxed as ordinary income.
Bottom line, use your professional judgment.
Rick
Rick -has it covered--the schedule D entry is usually a small loss due to a commission charge
The discount on the purchase of employee stock and employee stock options are always taxed as wages. Therefore, in same day excercise and sale of employee stock options, the cost basis is the selling price. Commissions paid to sell the stock, expense of sale, nets a small loss.
I just did a return for someone who excerised stock options. Just fill out the stock option worksheet with the #'s provided on the statement and it will properly report the sale on the 8949 (too lazy to see if thats the correct form #). The commission paid showed up as the loss and matched the # on the w-2.
