How to handle foreign stock gift from company and funky 1099-B form?

[jhodgesatmb]

My company (German) gave all of us a stock grant. They sold half the grant to pay taxes (in Germany?) and issued us a 1099-B that shows only how many shares were sold to pay the taxes and how much the proceeds were. They gave us, in a separate accounting, the full gist of how many shares were originally granted, what they were worth, etc., but I am guessing that they remain in Germany in my name. I have no idea how to address this 1099-B, since our 1099-Bs are supposed to be for when 'we' sell stock and need to claim ST or LT capital gains. This one is doing nothing of the sort, and they sold enough stock to account for a 40% tax rate! Does anyone know how to deal with this? I am getting zero help from the company.

[TomYoung]

You report the sale. 

Once the stock was "yours" then YOU are the only one that can sell it.  (If you look through all the original paperwork when the grant was handed out I'll bet you agreed that the company could do that "in your name."  Maybe you could have reached into your pocket and handed the company all the money needed "for taxes" and kept all the stock; some grants do allow that.)

Your basis in the stock almost certainly is the same as the per share "fair market value" used to calculate the compensation created by your receipt of the stock and reported on your W-2.  So, typically, a "same day" sale - acquisition and sale happening simultaneously - results in a small loss due to selling commissions and fees.

If the 1099-B is reporting the wrong basis then enter it exactly as it reads and click the blue "I'll enter additional info" button and enter the correct basis on the following page.

Tom Young