ESPP Sale of Stock on 1099-B


#1

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

W-2
$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


#2

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

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

Thanks!

Keith


#3

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


#4

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!

Catherine


#5

Hi Catherine,

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

Kelly


#6

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


#7

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