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How do I enter a sale of ISO stock of a private company (not traded on any exchange) where the buyer withheld escrow amounts?

I'm unclear here.  You say that no compensation was reported on a W-2, but then in your penultimate sentence you refer to "compensation reported"?

If the Strike price = Fair Market Value = Gross Selling price ($95K + $5K) then you have no compensation because there's no "spread" between the strike price and the fair market value and the gross selling price.  As a practical matter here you simply have a bunch of stock with a per share basis = strike price.

Generally there's no "income tax reporting" issues that dictate that you use the ISO "Guide me" interview, IF compensation was created by the disqualifying sale AND that compensation was reported on the W-2.  So since you have no compensation there is ESPECIALLY no need to use the ISO "Guide me" interview.  

And finally if strike price = FMV = Gross proceeds you have no gain to report so you could, if you wish, not report the sale at all.  Of course the IRS probably would inquire about the "missing" 1099-B so maybe you simply report the 2018 1099-B in the 1099-B interview with basis = proceeds for a gain/loss of $0, and you report proceeds of $2.5K of proceeds and basis in 2019 and the final $2.5K of proceeds and basis in 2020.

How do I enter a sale of ISO stock of a private company (not traded on any exchange) where the buyer withheld escrow amounts?

THANK YOU TomYoung!!  Your step-by-step instructions on how to navigate the Turbotax "interview path" worked like a charm!  I filed an amended return for last year and am now working on this year's wrap-up of the installment sale.

 

-John Sievers

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