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Need help understanding the new 1099B regulations.

I have a person Form...

I have a person Form W-2 box 12 with code v $123,388.70 and box 12 code Y 29426.67
the code v is for Non-statutory stock options and is included in his box 1 and 3.

In addition, he gave me Form 1099-B first sections says information is being reported to IRS,  box 1a, 1b, 6, 2, 3, 4, 5, 8 and 15 are all blank.

Then next section of 1099-B says this information is not being reported to IRS: report on Form 8949 with box B checked in either part 1 or Part 11 as appropriate; 
box 9 description- federal, BOX 1A 05/18/11, box 1B blank, BOX 6 NONCOVERED , QTY 6667, BOX 2 574262.52, box3 0, box4 0, box5 0, box 8 blank box 15 blank.

He insists I need do nothing with this form 1099B since all was included on his W-2. 
I am at a loss, the $57,4262.52 was the total sold and each employee got their part and it went on form W-2. Why didn’t Form 1099b show just his portion? I have no idea what to do with this on Form 8949 or Sch D.

I find these 1099b new regulations more confusing, please help.

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Answered in 20 minutes by:
3/15/2012
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,692
Experience: Taxes, Immigration, Labor Relations
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Hi and welcome to JustAnswer!

When you exercised stock options - there are two transactions - purchase and sale - and there are several reportings.
The amount reported on the W2 form box 12 with the code "V"-Income from exercise of non-statutory stock option(s) - is already included in box 1 as taxable wages. That amount is your basis in determination of capital gain or loss.
The sale transaction is reported on form 8949 and transferred to schedule D part I because you did not hold shared more than a year.

On form 8849 - you will report purchase and sale on the same day.

The sale price you need to take from 1099B

The basis is coming from W2 form box 12 with the code "V"

Let me know if you need any clarification.

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Customer reply replied 5 years ago

Okay, I am reading this year-end tax statement on the next page after the 1099-b is
schedule of realized gains & losses (Information not reported to IRS is used as basis for reporting on 1099-b)

Date of sale 05/19/11, date of acquisition 05/18/11, disposition transaction DWR,6667,
gross proceeds $574,262.52, cost of other basis $574,262.52 realized gain/loss $574,262.52, disposition meth FI

So does this change anything on how I should report this?
Not sure what to put on 8849.

Thank you for your time.

Ok - so you have purchase and sale dates.
your have gross proceeds $574262.52 - from 1099B
If the cost or other basis is reported on 1099B - you need to use it.
Your gain would be = (selling price) - (basis)
But - you need to report the sale transaction.
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Customer reply replied 5 years ago

The entries on 8949 I get I am to report the sale/purchase dates
selling price $574,262.52
cost basis $574,262
which shows basically $0 realized gain/loss

This is what is confusing: his 1099-b schedule of realized gains & losses (Information not reported to IRS is used as basis for reporting on 1099-b) it reports "realized gain/loss $574262.52, disposition meth FI". this seems contradictory.

Also, what is disposition transaction "DRW"?

Taxpayer says the $574,262 is the total sold that day among all employees. Why doesn’t 1099B just reflect his portion and match code V on the W-2?

First of all - I am not clear where did you get the basis? Is it reported on 1099B? - if yes - you are correct the gain is zero.

DWR normally stands for drawing - but the actual meaning should be conformed with the sender.

Whatever is reported on taxpayer's 1099B form - is the amount sold on HIS account - and that amount is not related to other employees.
If 1099B form doesn't report the basis - you need to use the amount on W2 with code "V" which reports the amount included in employee's taxable wage.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,692
Experience: Taxes, Immigration, Labor Relations
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