How do you treat FORM 1099 B from a profit sharing plan or emploee stock ownership plan?

[LesterM]

My father-in-law worked for Publix Super Markets part-time until his retirement in June of last year 2020.  Publix has a profit sharing plan or employee stock ownership plan which rewards their employees with the company's privately held stocks.  When he retired, he opted to cash out the stocks he was rewarded over the years he's worked with the company.  Having said that, he received a Form 1099 B for the sale of the stocks and a Form 1099 R for the distribution.  The amount reflected on both forms is from the sale of the stocks.  So, I was wondering if anyone can help shed a light as to how to report said forms.  If both forms are taxable income, why is there a need to report the same income twice in two different forms?  Additionally, reporting both forms as income will be redundant and appears as double taxation.  Help, please!  Your anticipated help will be greatly appreciated.

[ColeenD3]

Please see this answer from TomYoung.

I take it that you took your distribution "in kind" - stock - and that stock had some amount of NUA (Net Unrealized Appreciation).  You then immediately sold the stock.  If that's correct then:

Typically the 1099-R in this situation will have 3 boxes filled in: Box 1, Box 2a and Box 6 which is the difference between Box 1 and Box 2a.  You get taxed on the Box 2a amount and that's the basis of the stock.

Then you report the sale of the stock off the 1099-B.  The proceeds should be very close to the 1099-R Box 1 amount, the Box 2 amount is your basis and you have a gain more or less equal  to the NUA.  Be sure to indicate the sale is "long term".

So you're not double taxed.  You're taxed at ordinary rates on the "basis" portion, you're taxed on your LTCG for the NUA, and together those two numbers come back -"more or less" - to the 1099-R distribution.

Please see these additional links:

Publix

Publix 2