You would not report the sale of the entire 400 shares. The IRS form 1099-B sells the stock rights and not the shares themselves since you still have the shares.
I assume that the stock rights have an issue date and the sale of the rights was short term and not long term.
You were given the rights?
Your cost basis in the rights would be $0 or some allocation of your cost basis for the 400 actual stock shares over
- the cost basis of the 400 actual stocks, as well as
- the 400 rights.
What does the IRS form 1099-B with an X report?
I understand that it reports:
- 1a 400 stock rights,
- 1c date sold,
- 1d proceeds of 400 @ $3,50 / share,
- 4 $0 Federal income tax withheld,
- 5 Noncovered security marked,
- $0 state tax withheld.
The IRS form 1099-B would report the sale of the stock rights, likely short-term with basis not reported to the IRS.
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