The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Incentive Stock Options, W2 and 1099-B issue Date:  2/20/2014  8:01 PM
Author:  mjpersely Number:  120124 of 129670

I am hoping someone might know what to do in this situation or had a similar situation. Here are the facts:

Some company incentive stock options were excercised and then immediately sold the same day.

The company's HR dept said that the net profit was reported on the W2 as part of that year's salary and that taxes were already withheld and paid to the IRS.

The brokerage firm that the company used sent the employee of the stock option transaction a 1099-B for that same transaction that already appeared on the employee's W2 as part of gross salary. This 1099-B was reported by the brokerage to the IRS, so the statement says.

What should the employee do in this case as it was already reported as part of gross salary and income taxes taken out already. Yet, the fact that a 1099-B was received implies that you should report it on the 1040. However, doing so would subject that amount to double taxation.
Was it a mistake to receive the 1099-B? Should the employee just ignore it and assume no issue will result? Or, is there some other form to fill out that will right this all out?
Copyright 1996-2019 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us