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Author: exwa Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 123486  
Subject: stock options/pre-ipo shares purchased Date: 4/5/2001 8:25 PM
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hi all,

a quick question to the board:

my husband worked for an internet startup last year. he received stock options as part of his signing bonus, and bought $8500 worth of shares with his cash bonus rather than receiving a check (turns out they didn't have much cash floating around and he offered to take shares instead). the options and shares were forward looking, as the company had hoped to go public in the near future.

as with many other startups - no go on the ipo.

they laid him off in january, and he was not vested in the options - so they are gone. i assume i do not need to mention them on our tax forms.

now the company is going out of business, and the stock certificate is worthless as well.

we have received no special forms from the company regarding the options or shares - and i am wondering if and how i need to report them on our taxes. i presume there is nothing to tell, given the options are gone and the stock is worthless. the question is, do i need to report the receipt of the stock for last year's return as some type of income? my inclination is to say nothing. we don't pay for the $8500 given in stock, and we don't claim the $8500 loss later on. it's all a wash anyway - but i'm not sure the irs will go for that.


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