My wife sold shares of her former company in 2016. How do I report additional gains on those shares received in 2017 on my 2017 taxes?

[p-pounds]

When my wife's former employer was bought out in 2016 she sold her 6000 shares to the acquiring company and reported the capital gains on our 2016 taxes.  Certain milestones were met under the terms of the buyout and she received additional money for those shares in 2017.  How do we report that money on our 2017 taxes?

[DianeW · Accepted solution]

You will report it exactly as you did last year but without a cost basis because that would have been all used up last year.  This means the full amount will be taxable and at the capital gains tax rate if it is considered to be held long term.

You may have documentation that has already determined for you whether it should be considered long or short term under the terms of the buyout.

[p-pounds]

Thanks Diane.  Quick follow-up:  What do I put as date sold?  I tried to enter the original sale date (12/29/16) but TurboTax for 2017 gags on that date because (I assume) it's prior year.   The original amount was taxed as short term gains.  But if I use the dates we received the follow-on payments they will be taxed as long term gains.

[DianeW]

@p.pounds  You can use the date she actually received the funds. Sale date must be 2017 and reflects holding period.

[p-pounds]

Thank you very much.  I'll file it that way.

[DianeW]

@p.pounds You're welcome.