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I received a notice that I owed taxes on some stocks I sold…

I received a notice...

I received a notice that I owed taxes on some stocks I sold in 2016. This was stock awarded to me by my company and I had a waiting period before I could buy, sell or trade. I thought I had paid taxes on these stocks in 2015 because they were added as income by my company for my 2015 return. I am not sure how i should answer the IRS or do I have to pay the tax.

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

The stocks vested in 2015 and were added to my income and taxed in my 2015 tax return. I sold the stock in june 2016

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3/15/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,402
Experience: 15years with H & R Block. Divisional leader, Instructor
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Customer reply replied 5 months ago
Thanks

The amount you received for the sale was included as wages, in box 1 of your W-2 Form. But the sale also must be reported on Schedule D. When you do not report there as well, the IRS just takes teh sale amount reported to them by the broker and uses cost as $0. This is why they now tell you that you owe.

You need to tick on the reply that you disagree and send them an amended return (1040X) wiith the Schedule D information.

Shares you sold less than one year after purchase are considered short-term transactions and must be listed in Part I. Use Part II to report your long-term transactions. List the number of shares sold, the dates of purchase and sale, your cost basis, the sale price, and your gain or loss on the sale. The cost basis is the value of the stock on the exercise date. Total each column and complete the tax worksheet to determine your capital gains tax or capital loss deduction. Yes a loss because there is always a fee that deducts.

If you do not think you can complete this you need to have a tax preparer do it for you.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 18,402
Experience: 15years with H & R Block. Divisional leader, Instructor
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