No, there is nothing to report until you sell your ISO shares, at least in terms of gain or loss. When you sell the ISO shares, you will probably not get anything from the company as you were not there employee and moreover, it appears you are not working there anymore. However, the firm that effects the sale for you will likely send you a 1099-B or similar statement showing the sale proceeds, the sale date, and the sale price per share. However, the firm that sells the ISO shares for you will probably not know your cost basis in the ISO shares, and therefore, the cost basis on the Form 1099-B or similar statement may likely show 0 as your cost basis. Therefore, it is important for you to keep records showing your cost basis in the ISO shares as you will need this information to determine your gain or loss when you sell your ISO shares.
Because you still hold the ISO shares, you will need to enter such information into TurboTax in order to determine whether you owe the alternative minimum tax (AMT). TurboTax will do the calculations for you, therefore, all you need to do is to enter the information
In TurboTax online, to enter your ISO and AMT information, follow these steps:
- Go to Income & Expenses.
- Scroll down the page to Investment Income, and if necessary, click on the drop-down arrow to reveal more subcategories.
- Select ISO Exercise and Hold.
- Respond to the questions when prompted.
In TurboTax desktop the process is essentially the same. That is, in the income section, you will scroll down to the Investment Income section and select the subcategory ISO Exercise and Hold.
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