DianeW777
Employee Tax Expert

Retirement tax questions

Your selection should be one of the following if this is from your employer plan. Otherwise select 'Stock (nonemployee).

  •  ESPP, NQSO, ISO, RS, RSU, 

There is a great example and information on this situation as provided by @TomYoung below and at the link.

 

It appears that you've been awarded some amount of your employer's stock and the "fair market value" of the award, (or, if you paid something for the stock, the "spread" between the amount you paid and the "fair market value" of the award), has been reported as compensation on your W-2. 

 

Further,  I appears that some of that stock has been sold.  It's been sold either "for taxes", (i.e., you paid nothing for the stock), for a "cashless exercise", (i.e., you did need to pay some amount for the stock and the sale funds that payment plus the taxes), or you personally sold some stock "for cash".  It doesn't really matter why you sold the stock, your basis in the stock in all cases is the same: it's the per share "fair market value" used by the employer to calculate the compensation reported on the W-2 for the GROSS amount of the award. 

 

Click 'Examples' for more information.

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