ESPP Sale of Stock on 1099-B


Good Evening,

I am having difficulty determining the cost/basis to report on Schedule D for the sale of employee shares of stock through an ESPP. (Unfortunately, I am using ProSeries Professional.) Here are the facts:

1099-B (4 Transactions - 356 Shares)
$80,656 Net Proceeds
$39,859 Cost or Other Basis
Short-Term Covered Securities Basis IS reported to the IRS

$56,395 Code V

Is Code V what should be reported? Or is it 1099-B cost PLUS Code V? My client believes that he has paid all tax associated with the sale and remembers hearing other employees talking about “double-taxation” several years ago because the compensation element was being excluded from cost/basis.

Any insight would be GREATLY appreciated!



Kelly I will be glad to see if I can help!!

Let me know if you want to screen :tv: share later this evening!!




Hi Keith! Thank you SO much for your reply! What time would be good for you?


Hi Kelly,

The Code V on the W2 is a basis correction on the 8949/Sch D. The Code V amount is a DECREASE to the taxable gain. Correction code o2 (“o” as in mnop, not zero) “ordinary income reported elsewhere on return” the “elsewhere” being on the W2!



Hi Catherine,

Thank you for your reply! Is it possible that the Code V amount could exceed the taxable gain, creating a loss?



It usually does create a smallish ($25-$1000) loss, usually due to transaction fees and small differences in valuations between vesting and settlement.


That makes sense, but I’m coming out with a loss of $15,598.