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ESOP Company termination

My husband's company was bought out by another company, He had an ESOP with the original company, the plan was terminated and paid out when the company changed owners.  Do I still have to pay the additional tax, or can I enter the amount under Other "reasons you may not have to pay the additional tax" He was born 06/1963

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3 Replies
ThomasM125
Expert Alumni

ESOP Company termination

Income from the sale of the stock would be reported on his W-2 form in box 1 (wages) and there may also be some additional tax associated with the form 1099-B that you would receive reporting the sale of the stock. Often the basis reported on the form 1099-B is understated by the income reported on the W-2 form, so you need to adjust the basis by adding the income reported on the W-2 form.

 

Can you clarify that this is the "additional tax" you are referring to, or are you referring to a tax penalty, as that would not be associated with the sale of stock options.

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ESOP Company termination

 

This was from an ESOP (employer stock option)

 

 

Using Turbo Tax under Deductions and Credits

 

This situation May lower your Tax bill

 

if you used the money, Glenn took out of a Retirment account (other than IRA) for any of the following reasons, you may not have to pay the additional tax>

 

Other Reason 

 

- Money from an employer plan if you stopped working there by March 1, 1986, you have a written schedule for the payout of the money, and you get the payments according to the schedule.
- ESOP employer stock dividends
- Money from a deferred annuity contract that was invested in before August 14, 1982.
- Money from a deferred annuity contract for a personal injury settlement.
- Money from a deferred annuity contract purchased by your employer because the employer's retirement plan or retirement annuity plan terminated. The employer held the annuity contract until you stopped working there.

 

or am I reading this wrong?

ESOP Company termination

This was from an ESOP (employer stock option)

 

 

Using Turbo Tax under Deductions and Credits

 

This situation May lower your Tax bill

 

if you used the money, Glenn took out of a Retirment account (other than IRA) for any of the following reasons, you may not have to pay the additional tax>

 

Other Reason 

 

- Money from an employer plan if you stopped working there by March 1, 1986, you have a written schedule for the payout of the money, and you get the payments according to the schedule.
- ESOP employer stock dividends
- Money from a deferred annuity contract that was invested in before August 14, 1982.
- Money from a deferred annuity contract for a personal injury settlement.
- Money from a deferred annuity contract purchased by your employer because the employer's retirement plan or retirement annuity plan terminated. The employer held the annuity contract until you stopped working there.

 

or am I reading this wrong?

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