1099-B Selling Stock

[LindaCi]

I am retired and sold some stock in 2023 that I received from my company back in 2006.  The Transaction Type is titled SHAREVALUE TRUST DISTRIBUTION on my original acquisition of the stock.  I am having trouble with TurboTax question for Form 1099-B:  Do these sales include any employee stock?This includes ESPP, RSU, RS, NQSO, and ISO.

I think the answer is NO but I didn't purchase the stock either. So it is considered gifted I guess, but that doesn't seem to apply as the stock was given as a result of my working at the company the prior year.  I didn't actually purchase it but does 'my work' count as purchasing it.  I chose Stock(non-employee) as the type of investment that I sold and selected I received it as a gift. The cost basis is $0 and the Gain/Loss is $0.

I would like to understand a little more about this type of sale of my stock as I will be selling more of it in the future.  Are my selections accurate?

[ThomasM125]

I believe what you mean is you acquired stock in the company you worked for but did not purchase it. If so, it would be considered employee stock. Depending on what type of employee stock it was, there may have been income associated with the value of the stock reported in box 1 on your W-2 form in the year you acquired it or in the year you sell it. If so, you can include that income in the cost basis of the stock when you report it's sale. The Form 1099-B may not report the correct cost basis, as it often simply reports what you paid for the stock, if anything. If you were taxed on the discount you received that allowed you to acquire the stock for little or no money, that income would be reported on your W-2 form, and that would get added to your cost basis in the stock.

You may have to inquire about this from your employer or look on your W-2 form in the current year or years past to determine what the income reported was. You will also need to determine what type of employee stock was sold, incentive stock options, non-qualifying stock options, employee stock purchase or restricted stock units or awards. It is less important to correctly identify the type of employee stock it was than it is to not indicate that it was employee stock that you sold.

You may receive a form 3921 Exercise of Incentive Stock Option reporting information you will need to determine the proper treatment of the stock sale. If you choose one of the employee stock options when you enter your form 1099-B, you will see an option to enter the form 3921 information in TurboTax.

[LindaCi]

Thank you for your information.

I am still in a quandary on how to proceed.

I did not receive form 3921 Exercise of Incentive Stock Option and don't believe I will.  I could not acquire a copy of my W2 form.  I tried through Boeing HR - they only keep 7 years prior.  I could not figure out how to acquire the W2 from the IRS.  However, I did find an article from 2004 that talks about the initial Boeing's Sharevalue Trust program which to me indicates that I was taxed on the value of the stock prices that I received in those years.  This is the article: https://boeing.mediaroom.com/2004-07-01-Boeing-Employees-to-Receive-Stock-Awards-in-First-Payout-of-...

And in that article, the following paragraph leads me to believe I was already taxed.

Under the trust's rules, a payout could have occurred only if the average of Boeing's high and low stock price on June 30, 2004, exceeded a threshold of approximately $44.00. Yesterday's average was $50.825, so each employee with full participation (all 48 months of the trust's Period 4) will receive a distribution worth approximately $900 before taxes. The estimated total amount of the distribution is more than $142.5 million.

So... my question remains:  Should I just give in and have a 0 cost basis and pay taxes on the entire sale of the stock or should I assume that I already paid tax on the value of the stock in the year I received it?

Thanks again

[ThomasM125]

Most likely you would have paid tax on the value of the stock when you acquired it and it would have been reported as wage income on your W-2 form that year. Also, it appears to be a Restricted Stock Unit (RSU) from what you describe and if so, some of the shares would have been sold to pay the social security and Medicare tax due on the wage income associated with it. That would be 7.65% of the $900 in this case, or $69. So it is possible that the cost basis you can enter on the stock sale in 2023 would be the original value of $900 less $69, or $831.

[4-Speed]

I have a situation similar to this.  My old employer sold stock in August, 2023 that was originally part of an option granted to me on 4/9/1998 with an option price of $17.3437/share.  This 1998 option was exercised in a reload grant on 1/3/2001 at an exercise price of $31.875/share.  The 1099-B issued from ComputerShare on the August, 2023 share does not report a cost basis, only the number of shares sold, the sale price/share, and the  proceeds for each of the individual stock sales that made up the August, 2023 sale.  When I entered each of these individual sales into TurboTax Premier, it asks for the "Date options were granted" (4/9/1998), "Exercise Price per share", and "Number of Shares Sold" for each transaction.  My question is in regards to what to enter for the Exercise Price/Share?  Since there is no information in the 1099-B to tie directly back to the original grant from 1998, I assume that I can keep a spreadsheet of the stock sold  in 2023 (only part of the original option shares were sold) and start using FIFI to apply this and any future stock sales to this option until all of the stock finally sells in future years.   Is this appropriate?  Also, do I enter the Exercise price as $31.875/share?  If so, this would yield a negative cost basis since the August, 2023 sell price was $30/share.  I should also note that this stock split at least twice over the years between the time that I reloaded the option in 2001 and the sale in 2023.  

Looking back at my W-2 from 2001, there was a value of all options exercised (4 total) for 2001, but I cannot reconcile the $ reported on my W-2 with the total of all of exercise prices for each of the 4 options exercised that year. 

Since the 2023 sale was the first involving any of these 4 options, I want to make sure I'm reporting the correct basis since this will come up again in future years when I finish selling the stock  from these options.